What is the difference between a rich and a wealthy?
"What are you talking about? Aren't they the same?".
No. They both are different.
We can easily identify a rich. They come in fancy cars like Audi.
They will have fancy watch, bracelet, iPhone etc.
We will also get wish to have a similar life like them.
But in reality, when we look at their financial situation, they might live paycheck to paycheck.
They spent all their earnings on their fancy life style.
If they run into any trouble with their earnings, their story will turn upside down.
But this wealthy folks, it is not easy to identify them visually.
They might live a fancy life like a rich.
But their focus won't be on living a fancy life to impress others.
Their mindset will be very different. Wealthy mindset.
They become wealthy only because of that wealthy mindset.
What is that wealthy mindset? How do they think? How do they make decisions?
That is what we are dig deeper in this episode.
Hello everyone. My name is Vijay Mohan and you are watching - Investment Insights.
Folks with a wealthy mindset love money and they also respect the money.
They know the importance of freedom that money can provide to their lives.
But middle class folks like us say things like, money is not permanent, it will come and go.
Don't we give respect only when we get respect? Money is like that as well.
Only if we respect the money, it will respect us and will come to us.
Wealthy mindset people know this very well.
But that does not mean that they run behind money like a psycho.
At the same time, they won't disrespect the money as "Its just money".
They appreciate the value of the money and they try to make as much as possible.
Is it good enough to have that fire to earn more money?
A rich will have that fire. A middle class will have that fire as well.
But a wealthy, go a step beyond that.
They don't just focus on earning more money, they also focus on building their networth.
What is net worth? All assets after removing the debt is net worth. Wealth.
They focus on building that wealth. That is why they are "wealthy".
What does a rich do with their earned money?
They want to show the world that they are rich. So they focus on buying things like fancy car, bracelet, iPhone to impress others.
At least he is OK. He is buying things on the money he has earned.
But some middle class, they try to show off like a rich buying things on debt.
But a wealthy mindset person will not have any need to impress others.
They invest their earnings on assets that generate further income.
They build a house and rent it out. They build shops and rent it out. They also invest in Index funds for long term.
Their focus will be on income generating wealth rather than to impress others.
Another amazing characteristic that a wealthy has is, long term thinking.
"If you invest in an asset that grows at a rate of 15%, then in 50 years, it would have grown 1000 times".
When others come to know about this, what do they do?
"50 years? What is the point of having the money after 50 years?" - they will make fun.
But a long term thinking person would find that as interesting and will see how they can take advantage of it.
Not just in investments, they have long term thinking in all important decisions in their life.
When it comes to a marriage, most of them focus on the beauty and handsomeness of bride and groom.
But these folks focus will not be on that. Temporary beauty is not important for them. Permanent character is what they look for.
They focus on whether they would be compatible with them, and whether the relationship will work in long term.
Same with health as well. When every body thinks, "what is the purpose of life if we cannot eat biriyani..."
these long term thinking folks will say, "I have to live at least for 100 years to enjoy this biriyani" and they have the biriyani in moderate.
"I have to live a strong and healthy life till 100. What should I do Today to achieve that" - is how they think.
Then spending habits. A rich is in need of a car. What would he do?
"Everyone should turn around and look at me when I arrive" and so he buys a Benz car.
But they don't know that they people who are turning around are looking at the car, and not them.
But a wealthy would know that if they by an European car, it will give head ache after 4 years.
They will go for a Japanese as they would like to have a car that gives no issues for at least 15 years.
Not just in car, they will focus more on the quality of the product that can last for long time even if the price is bit high.
Don't go and buy expensive products saying that you are following wealthy mindset. That is not the point.
Expenses should be within our income. Cannot just buy everything that we like.
Buy quality things that you need. That is the point here.
When a problem arises, the wealthy minded people will look at the opportunity it provides.
They are positive thinking people.
If the management at work brings a change,
everybody will be focusing on the difficulties it brings along with it.
But these folks would focus on what opportunities does that change bring in? How can we take advantage of those opportunities?
Also they don't complain about the inability of the government or any other problems around them.
What should we do for our growth? What are all the opportunities available? Those would be their only focus.
When others run away from risks, these folks would take calculated risks.
When the middle class runs away from the stock market saying that it is way too risky,
these folks would take calculated risk and invest in an index fund knowing that it has good potential to give good returns in the long term.
There are some who says that risk taking is their second nature and will bet everything they earn on crypto.
Wealthy minded folks will not take blind risks like that.
They play the game which has great potential to pay out in the future. They don't gamble.
Other folks do not have any clue about their earnings and spendings. But not these wealthy minded folks.
They know exactly, how much they are earning, how much they are spending, how much have been invested, how much growth they achieved from the investments.
They have their personal finance at their finger tips.
When others try to get comfortable with their current job,
wealthy mindset folks would be very curious and always try to learn new stuffs.
Like James Clear said, if we improve 1% everyday, we will be 38 times better by the end of the year,
They might not improve 1% every day, but because of their curiosity, they would have learned a lot without them even realizing.
Just in 10 years, they will have many folds knowledge than an average person.
The last, but important characteristic they have is, patience.
When others are running around to see the fruit very next day after planting a seed,
these folks know that to eat a mango after 8 years, they have to plant the seed now. And they water it patiently to get the fruit in 8 years.
All these make a wealthy.
Do you want to become a rich or a wealthy? Your choice.
We will soon meet again in another episode. Thank You!