If you are wealthy
You have more than you will need
Not the same as “rich”

Of the many excellent ideas in Morgan Housel’s book “The Psychology of Money,” my personal favorite is that he separates what it means to be wealthy from what it means to be rich.

A wealthy person, in Morgan’s book, is someone who has financially planned in such a way as to have enough money to live exactly the life he or she wants to live. Wealthy people have managed their financial resources in such a way that they have autonomy in their lives.

This is an incredibly empowering idea. It liberates the idea of wealth from the requirement of high income.

Rich people, in Morgan’s book, have high incomes that support the purchase and financing of expensive things. They can afford to convert liquid financial resources to less liquid material goods, even when those material goods are going to lose value over time.

A rich person must have high income, but a wealthy person may or may not have a high income.

This means that being wealthy can happen to anyone adhering to a plan designed to make him or her wealthy. It means wealth is attainable, for many, many people. You just have to know what’s important to you and plan accordingly with your money.

What I love about this is that it describes a good and reasonable financial planning goal for nearly anyone: being wealthy. If that’s a goal of yours, we’re here to help.