Post: #1

Im highly interested in the distinction between the two.

What do you consider to be the defining characteristics of a rich person vs. a wealthy person?

Do they behave differently and why?

To give you an idea of what I mean, consider someone like Mark Zuckerberg vs. Baron de Rothschild.

Ive always felt that wealthy people/families were better at handling money and had more class than the nouveau riche.

You would never see a Vanderbilt walk into an important meeting with some turtleneck and denim on. I might be romanticizing the aristocratic lifestyle, though.

Id like to hear your guys' thoughts on this.

Post: #2

I look at rich more along the lines as "having the money"
as opposed to wealthy which "has the freedom"

By this merit, a rich person can have a job, get paid well, but is bound by their job, a truly wealthy person has freedom and is abundant in the most important resource in life: time.

Wealthy people can also be rich, but a rich person isn't necessarily wealthy.

Wealth is ongoing, rich is finite.

Post: #3

(06-26-2014 05:20 PM)Cunnilinguist Wrote:  You would never see a Vanderbilt walk into an important meeting with some turtleneck and denim on. I might be romanticizing the aristocratic lifestyle, though.

What of it? Zuckerberg might be a dork, but let's not lose sight of the fact that he's a self-made billionaire, as opposed to members of the old money families.

The nouveau riche label reeks of insecurity and jealousy toward the self-made man. "Aristocrats" or "nobles" going back into the mists of time have always wanted to feel superior to the unwashed masses, the hoi polloi. When one of the hoi polloi reaches or surpasses their heights, a cognitive dissonance - to use a psycho-babble buzzword - is created. So they seek refuge in the illusion that their noble blood or refinment or patronage of the arts(which they often don't actually like) makes them superior.

Post: #4

We're just talking semantics. I'd argue there's not a lot of difference between rich and wealthy because they're such general terms.

Now if you want to argue if there's a difference between a billionaire and a 10-millionaire, or a difference between the 1% and the 0.1% the answer is a resounding yes.

Post: #5

Cashflow.

Post: #6

(06-26-2014 06:36 PM)The PerSev Wrote:  What of it? Zuckerberg might be a dork, but let's not lose sight of the fact that he's a self-made billionaire, as opposed to members of the old money families.

The nouveau riche label reeks of insecurity and jealousy toward the self-made man. "Aristocrats" or "nobles" going back into the mists of time have always wanted to feel superior to the unwashed masses, the hoi polloi. When one of the hoi polloi reaches or surpasses their heights, a cognitive dissonance - to use a psycho-babble buzzword - is created. So they seek refuge in the illusion that their noble blood or refinment or patronage of the arts(which they often don't actually like) makes them superior.

Yea, i shouldve phrased it better. I didnt mean it in a condescending way.

Post: #7

"You aren't wealthy until you have something money can't buy." — Garth Brooks

Wealth is subjective. The most common definition you'll probably hear is having the freedom and money to do what you want. I believe it's the possession of vast amount of knowledge, experience, wisdom, and money even, too. Wealthy people change the world—I'd say Bill Gates, for example, is a wealthy man because he helped revolutionized how we use computers and technology overall.

Post: #8

9:49

Post: #9

^^ Lol feisbook, that's what I was talking about.

I think there is something about the wealthy that separates them from the rich like Gates, Zuckerberg, or pro athletes.

Call it a certain mindset, sophistication, and flair if you will. The Vanderbilts had it, the Rockefellers had it, and the Medici family had it during the Italian Renaissance.

In no way am I saying that the rich are somehow inferior.

Chris Rock said it well, "Shaq is rich. The man that signs his check is wealthy"

Post: #10

(06-26-2014 05:46 PM)TheFinalEpic Wrote:  I look at rich more along the lines as "having the money"
as opposed to wealthy which "has the freedom"

By this merit, a rich person can have a job, get paid well, but is bound by their job, a truly wealthy person has freedom and is abundant in the most important resource in life: time.

Wealthy people can also be rich, but a rich person isn't necessarily wealthy.

Wealth is ongoing, rich is finite.

This is a good explanation.

I remember reading somewhere that the difference between rich and wealthy is that a rich guy drives a luxury car to work, while a wealthy guy has a chauffeur.

Post: #11

Frankly - those are just semantics - most people have different perceptions of it - mine:

1 mio. $ - well-off (still working or living in modest conditions off interest)

10 mio. $ - somewhat rich (probably still working, but starting to enjoy more)

30-50 mio. $ rich (nice lifestyle, minor Jet Set feasible)

200 mio. $ wealthy (minor Yacht, small plane, a few nice houses, estate possible, family trust fund)

1 bio. $ + super-wealthy (big private planes, major yacht, houses around the world, 50+ private employees, big family trust fund, maximum consumer & Jet Set lifestyle)

100 bio. $ - 1 trillion + $ - Eyes Wide Shut Society wealthy (yes - they do exist - you meet plenty of guys at Wallstreet and in Switzerland who manage their wealth - the official Forbes list are a scam - the truly mega-wealthy are able to hide most of their money even off the official lists, as far as lifestyle goes - anything above a billion is no improvement - just a power-play)

Post: #12

Rich and wealthy don't have precise or technical meanings to be discovered.
I think net worth is what counts, and ownership of assets.
Someone can land a job paying $300,000+ a year, but that is a different thing from having $10m+ in assets, or owning outright a company making bank.

Post: #13

(06-27-2014 01:09 AM)Zelcorpion Wrote:  Frankly - those are just semantics - most people have different perceptions of it - mine:

1 mio. $ - well-off (still working or living in modest conditions off interest)

10 mio. $ - somewhat rich (probably still working, but starting to enjoy more)

30-50 mio. $ rich (nice lifestyle, minor Jet Set feasible)

200 mio. $ wealthy (minor Yacht, small plane, a few nice houses, estate possible, family trust fund)

1 bio. $ + super-wealthy (big private planes, major yacht, houses around the world, 50+ private employees, big family trust fund, maximum consumer & Jet Set lifestyle)

100 bio. $ - 1 trillion + $ - Eyes Wide Shut Society wealthy (yes - they do exist - you meet plenty of guys at Wallstreet and in Switzerland who manage their wealth - the official Forbes list are a scam - the truly mega-wealthy are able to hide most of their money even off the official lists, as far as lifestyle goes - anything above a billion is no improvement - just a power-play)

You are speaking of degrees of being rich, wealth is different. The dictionary definitions make these two words synonyms, and you can take them as they may be. But, wealth can be in everything from time to women to money, and a combination of all three. However, once reaching a level of richness, you obtain wealth.

In my opinion, when you reach 10mil in assets, you are wealthy. By this I mean your money is working to earn you more money, and you are now buying time. You can golf on a tuesday morning, show up to your business whenever you please (because people that are employees hardly ever get wealthy), and travel the world whenever you please. If you make just 5% on your money, that is 500k a year to play around with. Some people have more expensive lifestyles, but for my purposes, that is more than enough to travel, not work, own businesses, and continue purchasing assets such as real estate, stocks and bonds, and investing in others. Rich is money, wealth is something money cannot buy, it is a mindset that only comes through study, execution, and failures.

Edit: RawGod has it down.

Post: #14

(06-27-2014 09:32 AM)TheFinalEpic Wrote:  You are speaking of degrees of being rich, wealth is different. The dictionary definitions make these two words synonyms, and you can take them as they may be. But, wealth can be in everything from time to women to money, and a combination of all three. However, once reaching a level of richness, you obtain wealth.

In my opinion, when you reach 10mil in assets, you are wealthy. By this I mean your money is working to earn you more money, and you are now buying time. You can golf on a tuesday morning, show up to your business whenever you please (because people that are employees hardly ever get wealthy), and travel the world whenever you please. If you make just 5% on your money, that is 500k a year to play around with. Some people have more expensive lifestyles, but for my purposes, that is more than enough to travel, not work, own businesses, and continue purchasing assets such as real estate, stocks and bonds, and investing in others. Rich is money, wealth is something money cannot buy, it is a mindset that only comes through study, execution, and failures.

Edit: RawGod has it down.

Yes and no - I have met guys who were always fiscally responsible and attaining net assets of 100 mio. $ only marginally changed their lifestyles - by marginally I mean a supercar, a great home with huge estate and a small sport-plane.

On the other hand I know guys with net assets of 20 mio. $ who started buying several homes, a horse breeding enterprise, a yacht, a bigger plane and were out of money within 10 years when the company they built tanked.

Most people also underestimate the costs racking up when they reach 10 mio. $ and then try to emulate the guy owning a 30 mio. $ house.

The definitions are however really subjective.
What you do with your money may give you freedom or it might ensnare you. On that matter you could argue that wealth is a mental thing which it partly is, but that is more a philosophical discussion.

Post: #15

(06-27-2014 10:56 AM)Zelcorpion Wrote:  Yes and no - I have met guys who were always fiscally responsible and attaining net assets of 100 mio. $ only marginally changed their lifestyles - by marginally I mean a supercar, a great home with huge estate and a small sport-plane.

On the other hand I know guys with net assets of 20 mio. $ who started buying several homes, a horse breeding enterprise, a yacht, a bigger plane and were out of money within 10 years when the company they built tanked.

Most people also underestimate the costs racking up when they reach 10 mio. $ and then try to emulate the guy owning a 30 mio. $ house.

The definitions are however really subjective.
What you do with your money may give you freedom or it might ensnare you. On that matter you could argue that wealth is a mental thing which it partly is, but that is more a philosophical discussion.

What I'm putting out there is not how one spends on lavish items. What I'm saying is that if you have everything you want and you're free to do what you please, you are wealthy.

Read this parable, and you will understand what I'm putting down.

The Parable of The Mexican Fisherman And The Banker

An American investment banker was taking a much-needed vacation in a small coastal Mexican village when a small boat with just one fisherman docked. The boat had several large, fresh fish in it.

The investment banker was impressed by the quality of the fish and asked the Mexican how long it took to catch them. The Mexican replied, “Only a little while.” The banker then asked why he didn’t stay out longer and catch more fish?

The Mexican fisherman replied he had enough to support his family’s immediate needs.

The American then asked “But what do you do with the rest of your time?”

The Mexican fisherman replied, “I sleep late, fish a little, play with my children, take siesta with my wife, stroll into the village each evening where I sip wine and play guitar with my amigos: I have a full and busy life, senor.”

The investment banker scoffed, “I am an Ivy League MBA, and I could help you. You could spend more time fishing and with the proceeds buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats until eventually you would have a whole fleet of fishing boats. Instead of selling your catch to the middleman you could sell directly to the processor, eventually opening your own cannery. You could control the product, processing and distribution.”

Then he added, “Of course, you would need to leave this small coastal fishing village and move to Mexico City where you would run your growing enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then?” asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich. You could make millions.”

“Millions, senor? Then what?”

To which the investment banker replied, “Then you would retire. You could move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

Post: #16

(06-27-2014 10:56 AM)Zelcorpion Wrote:  Yes and no - I have met guys who were always fiscally responsible and attaining net assets of 100 mio. $ only marginally changed their lifestyles - by marginally I mean a supercar, a great home with huge estate and a small sport-plane.

On the other hand I know guys with net assets of 20 mio. $ who started buying several homes, a horse breeding enterprise, a yacht, a bigger plane and were out of money within 10 years when the company they built tanked.

Most people also underestimate the costs racking up when they reach 10 mio. $ and then try to emulate the guy owning a 30 mio. $ house.

Zel which one do you see more of? The guy who has 100M and doesn't spend or the 20M guy who loses it all? Very curious, thanks!

Post: #17

(06-27-2014 11:16 AM)samsamsam Wrote:  Zel which one do you see more of? The guy who has 100M and doesn't spend or the 20M guy who loses it all? Very curious, thanks!

Due to my previous jobs and contacts I met more of the fiscally responsible guys who were often the same penny-pinchers trying to negotiate in the Armani store when buying shoes and pants (real life example trying to get a 10$ discount on a pair of loafers and walking off in a huff when not getting their way). Somehow they could not adjust their thinking and say: OK - I am rich now and I can spend 300.000$ - 1.000.0000$/ year without making a dent - simple budgeting - no need to save 5$ on some waiter's tip while having 100M in assets & great income. You can be financially responsible without turning into scrooge.

I met the 3-20m spendthrift guys occiasionally, I saw some of their companies succeed, we worked for a time together and I also read about their bankrupcies in the papers later on. My estimate is that more than 50% of the guys lose the money blasting it all away. But it depends on how they came to money - building it up slowly or coming fast to riches like celebrities, sports-stars and some entrepreneurs who got deluded fast - those usually end up close to penny-less later on.

But that YOLO attitude is prevalent I guess - looking at the recent lottery winner thread on RVF who won 1 mio. Pounds net and is blasting it away on a lifestyle as if he had won 20M.

On the other hand - life is for living and you learn through experience - better luck next time if you believe in reincarnation.

Post: #18

Zel, I think you are spot on about how the money was made. If someone really struggled for it, they appreciate it. If it came too fast, MAYBE, there isn't as much appreciation for it.

I get that life is to be experienced. But I don't necessarily think everyone should experience a BK, or lose it all. Not a life experience I want

Post: #19

Calling Gringuito for his take on this issue!

I would love to see what this guy has to say about it.

Post: #20

(06-27-2014 12:01 PM)TheFinalEpic Wrote:  Calling Gringuito for his take on this issue!

I would love to see what this guy has to say about it.

The cool thing about him beyond his knowledge (which is a lot) is that he seems pretty grounded. No Hype.

Post: #21

One rich guy I know taught his son a funny lesson about money which is a bit unusual.

When his son turned 18 he gave him about 75.000$ - his son never had that kind of money at his disposal as his dad tried to teach him the value of money since childhood. Also his dad told him: "Go have a blast son!" So of course the young guy went out and had plenty of fun with the money - in Eastern Europe at that & also travelling with girls and his buddies, so it could buy some really fun times. After a few months he came back and asked sheepishly for more, since he wanted the good times to continue.

His dad said: "Since you know how to spend it son, you have to think how to earn that kind of money. Want to have that lifestyle? Think of a career, work for the family company, do your own thing - I don't care as long as you work hard on that path."

Post: #22

(06-27-2014 12:48 PM)Zelcorpion Wrote:  One rich guy I know taught his son a funny lesson about money which is a bit unusual.

When his son turned 18 he gave him about 75.000$ - his son never had that kind of money at his disposal as his dad tried to teach him the value of money since childhood. Also his dad told him: "Go have a blast son!" So of course the young guy went out and had plenty of fun with the money - in Eastern Europe at that & also travelling with girls and his buddies, so it could buy some really fun times. After a few months he came back and asked sheepishly for more, since he wanted the good times to continue.

His dad said: "Since you know how to spend it son, you have to think how to earn that kind of money. Want to have that lifestyle? Think of a career, work for the family company, do your own thing - I don't care as long as you work hard on that path."

That is cool. I may do something like that for my nephews - maybe not 75k lol. I have been carefully watching my nephews to make sure they are growing up with a solid foundation. Luckily their parents are great and grandparents are around. There is a village looking after them.

Zel, your story reminds me of something I heard where these parents gave their kid a box of cigarettes and made him smoke it all. He hated it so much, never wanted it again (could be an old wives tale).

Post: #23

(06-27-2014 12:01 PM)TheFinalEpic Wrote:  Calling Gringuito for his take on this issue!

There are two ways that people are looking at this. The first is based on net worth. The guys that manage money seem to talk about high net worth or ultra-high net worth. I would be in the latter group.

There's the class based way of looking at this. For example, I could afford a house in the Hamptons but I would never be comfortable living there. I'm distinctly in the nouveau riche category as I'm first generation money.

I completely agree with the comment about how you made your money being very important. It took me quite a few years of building up different companies, with more than a few failures along the way. I'm not a penny pincher like some wealthy people but I also make sure I spend less than I'm able to accumulate adjusting for inflation.

My own take on this is being rich/wealthy is not based on money. I have my health, good friends, a great family, and someone that means more to me than anything in the world. I know how completely lucky I've been.

Post: #24

I guess you could say "rich" is about cash.
I'd say "wealthy" is more about net worth.

Wall Street traders are rich. Proprietors are wealthy.

Post: #25

I can't believe this is not on here already
[youtube]http://www.youtube.com/watch?v=4m37JkkGjAY[/youtube]