Rich and wealthy are two words that people frequently interchange because they think they mean the same thing. However, this is not true.

To be rich normally means someone has high earning power or an abundance of money at a particular point in time. They could be earning a lot of money but spending almost all of it. The person could have an expensive vehicle, a mansion, many vacation trips, and lifestyle needs requiring a lot of money to support.

Wealth has a more general definition than income. Usually, wealth is related to net worth where you subtract debts from everything you have in terms of money and assets such as stocks.

So, someone with high earnings is not necessarily wealthy since if he or she spends all of it, his or her wealth accumulation will not necessarily be much.

In my opinion, the easiest way to put it is:

Rich tells about income. Wealth tells about accumulation.

This distinction becomes even more obvious if one considers the financial sustainability.

There are two individuals. One makes a lot of money and spends almost all of it. The other makes slightly less, but manages to save and invest at least part of the income, and has reasonable level of debts.

For the former person life style would seem richer, for the latter person it would imply making a fortune.

However, it does not mean that spending the money is necessarily bad thing, and rich people have to live miserably. The definition of wealth just shows the ratio of income, spending, assets and liabilities.

Investments are also very important, since assets could create income or grow in value with time, but any investment is always associated with certain risks and the return of investment is not guaranteed.

Thus, being wealthy has nothing to do with looking wealthy.

Wealth means that there are financial resources which could help you to live without making a fortune all the time.

Rich is visible. Wealth is hidden.

That's probably the main difference between these terms.

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