Poor, Rich and Wealthy are three common words that even your 5 years old knows the definition to. A child could probably tell you those words mean someone with less to no money vs someone with a lot of money vs someone who got Sh*t load of money like Walter White in Breaking bad. But when I think of those words I usually define them in a different way. I think of them in a way that helps me be financially healthy and of course try to make me more money. Let’s dive into the definitions of each word.
Poor is when you reach out in your pocket to pay someone else especially for something that you don’t need.
Rich is when you decide not to spend the money on something you don’t need.
Wealthy is when your money is working for you. Simply put your money is out there to make you more money.
Our boy Joe is about to pull the trigger on that new TV, cable, internet, wireless, phone and security bundle because the sales person talked him into it and convinced him that it’s an investment, savings, etc..
Our boy Joe actually doesn’t need any of that because he only uses his wireless and internet services and it cost him $100/month. The new bundle will cost around $250/month, so there goes $150/month that Joe needs to decide whether he should commit to or not.
Let’s see Joe’s options
Joe would make himself $150 poorer each month if he decided to get the extra services that he really doesn’t need.
Joe would make himself richer by not giving that extra money to his service provider because he will be putting an extra $150 in his pocket every month instead of spending it on things he doesn’t need.
Joe would be a wealthy man if he takes the $150 that he was going to spend on something he doesn’t need and make that money work for him and earn him extra cash by simply investing an extra $150 every month.