Many people consider themselves to be rich, but most of them aren’t wealthy. You might be wondering what the difference is. What makes a person rich, and what makes them wealthy? And how can you make the transition from one mindset to the other?
What Makes A Person Rich?
If you have a lucrative job that allows for a luxurious lifestyle, you’re probably rich. You might have a lot of cars, a lot of high-limit credit cards, and other expensive items. It might seem like the ideal for many people, but let’s talk about what this kind of mindset costs you in the long-term.
Well, for starters, you are linked to that job. That means that your entire lifestyle is going to be reliant on that job. If you can no longer keep working in that position, then you’re going to lose your source of income. Nobody likes to consider the idea that something could happen to them, but bad things happen every day. You could end up in an auto accident, you could get sick, or you could simply get laid off or fired.
Having a job like this is often referred to as the rat race. You may have heard this reference used before, but not truly understood what it meant. When you’re in the rat race, you do the same thing every day, you get the same rewards every day, but you never get any advancement. This can also be called living paycheck to paycheck. Even if you’re putting money into savings, you’re still reliant on that weekly or monthly check to survive.
Most people are comfortable with this lifestyle. They feel a certain amount of security knowing when they’re getting paid and how much. There’s nothing inherently wrong with this lifestyle, but it doesn’t make you wealthy, it just makes you rich.
What Makes a Person Wealthy?
So now that you know a lucrative job can make you very rich while not necessarily making you wealthy. What does make a person wealthy then? Wealth is actually linked with free time. Being able to take off on a vacation when the month is over or being able to take a Tuesday afternoon for yourself, or even have a margarita or two on Taco Tuesday without worrying about that 6am alarm. Just being able to work when you want and how much you want – that’s when you know that you’re wealthy.
I took the day to drive up to Dana Point to paddle board with mom.
Even if you’re not making as much money as that high-paying job, having free time means that you’re capable of setting your own schedule. You can work as much as you want for however much money you want. You’re not part of the rat race any longer because you determine the amount of money you earn by how much work you put in each day.
Of course, this free time allows you to focus your time on projects that will begin to generate passive income. Passive income is revenue that you get – sometimes weekly, sometimes monthly, and sometimes even daily! – without having to work for it.
A wealthy person understands that working hard in the short-term to build up passive income sources will allow for them to have free time in the future where they can maintain their lifestyle without having to worry about working for it. If something happens to them, that passive income keeps coming in anyway. Passive income can start off small and bloom into something much larger.
Going from Rich to Wealthy
If you are ready to make the transition from being simply rich to being wealthy, then you’ve achieved a mindset that not many people ever manage to get. The first step that you must take when you’re ready to become wealthy is leaving the rat race behind. You may no longer be comfortable working in a job that doesn’t allow for passive income to begin to grow. There are many ways that you can achieve this new lifestyle ideal.
These tips will work for people who aren’t considered rich as well. You don’t have to have a lot of money to start working to build up your passive income, you just have to have the determination and the constitution to work hard every day. So how do you do it? How do you break out of the rat race?
Investments are a Good Start
One of the primary ways that people begin to leave the rat race and start building up their passive income is by investing their money. You can put back a little each month from your paycheck and begin investing in companies, products, or people that you believe in. Just make sure that you’re doing enough research before-hand — you don’t want to be just throwing your money away.
Making the right calls on investments can lead to a little or a lot of passive income. Just imagine the people who invested in Amazon before it became a big-brand name or Bitcoin before it hit $20k. Once you begin to make money from the investments that you’ve made, it’s income that you no longer have to work to get.
Running Your Own Business
If you have an entrepreneur mindset, then you might have already considered beginning to build your own business and brand name. I’ll be trying me best to distribute Chapfloss when it’s completed. This can be a great way to begin making money and setting your own schedule, depending on what you want to do. Keep in mind, however, that just because you own your own business, doesn’t mean that you don’t have work to do. You’re in charge of everything. That means you have to be willing to put in the work in order to make the income.
Making good business decisions and working hard will eventually pay off, as long as you play your cards right. Eventually, the goal of owning your own business is to be able to hire people to do the work while you sit back and collect the passive income that your business generates.
Some examples of businesses that can generate income are writing e-books (or regular books), building an app that people want to use, teaching an online class and having a website that requires a monthly membership.
Affiliate Marketing Can Do Wonders
Affiliate marketing is when you promote someone else’s services or products and get a commission from the sale of them. If you set up a website where you promote these things for other people or businesses, it can be a great way to earn passive income. Just make sure that you’re making great choices on who to promote. I’d recommend Wealthy Affiliate if you want to learn how to do this. They are by far the best education and support anyone could ask for starting out. If you are already familiar, then, I’d say check out the Builderall platform strictly for their two-tier commission system. Those dollars adds up fast!
At the End of the Day, It’s All Up to You
In the end, you need to realize that what you receive is wholly dependent on the work you do and the attitude you have. If you live a life full of ambition and positivity, you’re going to generate a lot more of everything, including money and happiness. You can be rich, wealthy, or both! Just remember to settle for nothing less than your best and keep trying to work on ways to get out of the rat trap and generate that passive income. It makes all the difference!