This One Mindset is the Difference Between Being Rich and Being Wealthy

So you have money. And the more you earn, the more options you have. But a new book that distinguishes the rich from the wealthy — yes, there’s a difference — argues that the rich might grow poorer in the years to come, while the wealthy will stay that way and have a very large nest egg in retirement.
In “The Thin Green Line: The Money Secrets of the Super Wealthy,” author Paul Sullivan argues that the wealthy spend 30% less on eating out and thus save 30% more for retirement. The rich, meanwhile, rack up debt not by buying a house, but by purchasing new clothes, shoes and frequenting restaurants — things that aren’t really necessary. While Sullivan claims that dinners out won’t necessarily make the rich middle class or poor, doing so often can rack up debt.
Staying wealthy has less to do with your assets and more to do with your mindset, according to Sullivan. The wealthy have achieved financial security because they’re in control of their money. As Sullivan put it:

“It’s making rational choices to make sure you’re still wealthy many years from now.”

So how do you do it? It’s simple. If you want to eat out, first see how much you make a month and where that money goes to (mortgages, rentals, car payments or upkeep, etc.). If you are left with disposable cash, then by all means dine out, but do so about once a month rather than once or twice a week.
In order to become wealthy, the temptation to constantly spend money has to be curtailed. If you splurge at your favorite restaurant and order a lot of drinks, but don’t know how to save or don’t think you need to while you are still young, you aren’t on track to being on the right side of the green line — the line that “divides wealthy people from rich people, poor people and just about everyone else,” explains Sullivan.
Not funding your 401(k) while you’re young or still working also puts you on the wrong track. If you have one and take the money out from your paycheck to fund it, you probably won’t miss the money. And saving money so that it can compound over time is a great way to become wealthy as you grow older.
While the rich might take home a high paycheck, their finances are dependent on uncertain premises. They might buy an estate, a second home or have multiple luxury cars, but if they become unemployed or their financial security becomes distressed, they can lose it all.
When you equate net worth with self-worth, you might end up living a lifestyle that “puts you on the wrong side of the green line.”
Being on the right side of the green line is all about making better money decisions. Sullivan explains:

“The savviest people are still enjoying themselves today. They’re not living like monks, but they’re imagining a time in which something will go wrong and very carefully putting money aside. They’re making sure they have that cushion so when that thing does happen, it’s not completely destructive to the life they were living.”

The rich rarely become wealthy when their finances aren’t in order and disposable income is spent on things they don’t truly need. So live like the wealthy and put down that new bespoke suit or that pair of Blahniks.
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