Staying wealthy is more important than becoming rich because true wealth involves sustainable financial security achieved through disciplined management, diversified assets, and long-term financial discipline, whereas being “rich” often implies only a high income or a temporary accumulation of cash that can be easily lost due to poor financial habits, debt, and a focus on immediate gratification.
When you see someone driving a nice car, you rarely think, “Wow, the guy driving that car is cool.” Instead, you think, “Wow, if I had that car people would think I’m cool.” Subconscious or not, this is how people think. It’s a subtle recognition that people generally aspire to be respected and admired by others, and using money to buy fancy things may bring less of it than you imagine. If respect and admiration are your goal, be careful how you seek it. Humility, kindness, and empathy will bring you more respect than horsepower ever will.
Staying Wealth is What You Don’t See:
Spending money to show people how much money you have is the fastest way to have less money.
The most important one about money is, Wealth is what you don’t see. Wealth is the nice cars not purchased. The diamonds not bought. The watches not worn, the clothes forgone and the first-class upgrade declined. Wealth is financial assets that haven’t yet been converted into the stuff you see.
When most people say they want to be a millionaire, what they might actually mean is “I’d like to spend a million dollars.” And that is literally the opposite of being a millionaire.
Investor Bill Mann once wrote: “There is no faster way to feel rich than to spend lots of money on really nice things. But the way to be rich is to spend money you have, and to not spend money you don’t have. It’s really that simple. We should be careful to define the difference between wealthy and rich. It is more than semantics. Not knowing the difference is a source of countless poor money decisions. The problem for many of us is that it is easy to find rich role models. It’s harder to find wealthy ones because by definition their success is more hidden.
There are, of course, wealthy people who also spend a lot of money on stuff. But even in those cases what we see is their richness, not their wealth. We see the cars they chose to buy and perhaps the school they choose to send their kids to. We don’t see the savings, retirement accounts, or investment portfolios. We see the homes they bought, not the homes they could have bought had they stretched themselves thin. Keep this in mind when quickly judging others’ success and setting your own goals.
Save Money for staying wealthy
The only factor you can control generates one of the only things that matters. How wonderful. Wealth is just the accumulated leftovers after you spend what a you in. And since you can build wealth income, but have no chance of building wealth without a high savings rate, it’s clear which one matters more. So people’s ability to save is more in their control than they might think. More importantly, wealth is relative to what you need.
If you carefully think, one of the most powerful ways to increase your savings isn’t to raise your income. It’s to raise your income. It’s to raise your humility. Its a daily struggle against instincts to extend your peacock feathers to their outsmart limits and keep up with others doing the same.
Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you. As I argue often in this book, money relies more on psychology than finance.
