I know this statement might sound ambiguous, but it’s true. If you think about it criticall, and a little outside of the box, money doesn’t necessarily equal wealth.
I know we tend to classify anyone driving a classic car, dresses well, and occasionally flaunts his or her life on Instagram as wealthy. However, in reality, most of them are just rich. It takes time to amass wealth.
Let me ask you a question;
What comes to your mind when you think of Elon Musk, the founder of Tesla and SpaceX? Is he rich or wealthy?
We will soon find out.
If you have been reading most of my earlier posts, you should already have a good idea of my take on money. Believe me; I still have it now.
I have a lot of money. When I was employed at Microsoft, I was earning more money than I could imagine. However, I wasn’t free.
Yet, I really wanted freedom. I craved for it. So, I left my high-paying job and began my journey to entrepreneurship.
As for me, Money is not real but just something human beings created as a measure of the value of time. Hence, time to me is the real deal. You can never buy yesterday. And if you can’t buy it, it means you need to preserve it.
Thus, as an entrepreneur, don’t focus on money. Focus on creating more time for yourself and your family. You may not be there already, but soon you will be.
What’s to be rich?
The next question is always to know what it means to be rich. And that can be summed up this way; having a lot of money. Money is riches but not wealth. It’s the amount of income you get at the end of the month.
Before quitting my job, I was rich. My salary was well around six figures in a month. Guess what? I wasn’t yet wealthy. I didn’t have the time nor as many assets to generate money for me.
And this is an everyday norm with people who are employed. They continuously work hard to get a higher pay to buy a house, an ultra-modern car, and a promotion. Ideally, they are working to become rich.
Having wealth is about owning possessions in your life that money can’t buy. Can you buy time? No. That means if you have it, you are wealthy.
Wealth to me is about having money to live on my terms, spending time with my kids, and work whenever I feel I want to.
Thus your goal as an entrepreneur is to amass wealth, not riches. You can do this by establishing multiple income streams and setting up systems that work to make money for you.
Differences between money and wealth
What’s the difference between rich people and wealthy people? Well, as you can see, these are really different kind of people:
- Wealthy people know how to make money
Rich people have money but are constantly in debt. They have an income but are also heavy spenders. These are the people who can spend about $35,000 on a car and stay broke for some time.
The wealthy, on the other hand, know how to make money. They know how to make use of opportunities, take risks, and get the reward.
- They own assets
Wealthy people own assets that constantly make money for them. They have more than one income stream that feeds them, finances their luxuries and comforts, and enables them to maintain their lifestyle.
The rich have money but no assets. They are often chasing money and increasing their possessions.
- Riches fade over time while wealth multiplies
The sad thing about riches is that they disappear over time. Money diminishes over time while wealth lasts for years. It’s also easy to become rich. Just earn a million dollars now, and you are rich. However, becoming wealthy takes time.
So, as an entrepreneur, my advice to you is to focus on becoming wealthy. It’s just like the Rockefellers. They had amassed wealth that lasted for generations. Ask yourself what you can do to have more time for yourself and your family. If you keep acquiring possession that money can’t buy, then you are becoming wealthy.
An entrepreneur needs to be wealthy
How can you build wealth?
Find an income stream
The journey to wealth should obviously start somewhere, right? You need an income stream, then. Most probably, a job will do. If you don’t have a job, find employment somewhere.
You can even work online. Just choose a service you can offer, establish a website, and build your way to wealth.
An income stream will help you create assets and hence build wealth.
Apply the 50/30/20 rule
Here is how the rule states:
50% is for needs such as rent, food, clothing, health, and utilities such as electricity, water, and sewer.
30% is for wants such as entertainment (music sites, movies), vacations, hobbies, and outings with friends.
20% is for savings and debt payment
The moment you have money, choose to allocate them based on the percentage here.
Now that you have one income stream and have some money in your savings account, the next thing to think about is another income stream. Yes, an entrepreneur should have at least seven streams of income.
Depending on what you like best, invest your money in less risky ventures. You still can’t risk with money you can’t afford to lose. So, invest only in what you understand and can get returns.
Manage your expenses
There is a tendency to spend money whenever it comes in. Well, I know you dearly want that nice car and a vocation.
However, limit your expenditure. If it doesn’t fit in the 30% bracket, don’t do it. If you manage your expenses, it becomes easy to build wealth.
Let’s hope you now understand why some people, such as celebrities, are rich but not wealthy. It takes time to be wealthy. As an entrepreneur, build wealth over time. You won’t regret it.
Want to put a system in place that will give your hours of your time back every week and make your whole business run smoother? Download my Dual Funnel System training today and walk with me as we build an automated system for your business in 30 days!