Who is Really Rich – the Affluent or the Wealthy?

“We’re gonna be rich!” Don bellowed as he beat his fist against the steering wheel.

He drove a white Lincoln Continental with burgundy leather interior. It was longer than most living rooms and at that moment was lumbering down I-55 from St. Louis to Jackson, MS. The windows were down and his heart was full. 

Fresh off a highly motivational conference, Don was convinced he’d just learned the secret of spinning straw into gold. A good sales conference will do that for you. 

Fast forward 30 years and by most accounts, Don is indeed rich. Based on what he learned that day, he started a company, built it into a national powerhouse and sold out a few years ago. The white Continental is gone, replaced by a mansion with Greek statues in his back yard, standing watch over his marble pool. 

Don has always been into external displays of his wealth.

It’s been a while since I talked to Don, but unless a lot has changed, he would say those are not the things that make him rich. He’s married to his high school sweetheart. Together they have two children, who now also have spouses and children of their own. The company Don created has helped a lot of people realize their financial dreams.  

The apostle Paul had some incisive words for wealthy people. Those who are “rich in this present age” are to be humble, recognizing the Source of their wealth and “be rich in good works, to be generous and ready to share…”

Don is rich in that way, too. 

So are many who don’t have nearly as many financial resources as Don does. 

That begs the question – what does it really mean to be wealthy?

First, we need to understand the difference between affluence and wealth. 

The brain surgeon earning $1,000,000 a year is affluent. The trial lawyer making $100,000 a month is affluent. The pharmaceutical sales rep making $500,000 a year is affluent. The farmer making $750,000 from an outstanding corn crop is affluent. 

All of the above are affluent. They make a lot of money. But how much of it do they keep?

Contrast that with guy who works 40 years in the mill and retires. He’s got Social Security and takes the required minimum from his company 401(k) plan. Most months he doesn’t spend that. He spends his time fishing, hunting whatever is in season and volunteering at church. He lives in the same 2,000 square foot house he raised the kids in and most Friday nights, he takes his wife (“Momma”) to the catfish restaurant for a night out. He loves his life.

No one would call him wealthy. But he may be happier than the brain surgeon, trial lawyer or drug sales rep. And he is at least financially independent. 

Affluence is all about income. Wealth is about the outcome. 

Affluence tends to be temporary. Wealth tends to be permanent.

There isn’t a technical definition of “wealthy,” but like the Supreme Court justice said about another popular topic, “you know it when you see it.”

I might suggest a simple working definition of wealthy as “having enough to be financially self-sufficient, worry free, with enough to share.” 

Using that definition, one person could have $500,000 and be “wealthy,” and another have $10,000,000 and not be wealthy (I was recently in New York City…believe me, such a thing is possible). 

There is a path one can take to move from mere affluence to lasting wealth. But we don’t have room for that this week. Let’s take it up in this space next week.

In the meantime, you can start your own journey to financial independence (and maybe even wealth) write to me at bmoore@argentadvisors.com and request your free copy of my e-book “How to Put Financial Worries in Your Rear View Mirror.” There’s no cost and no obligation. 

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