He also drove a brand-new Dodge Stealth when he was just 16 years old, which is pretty over-the-top when you think about it.<\/p>\n In the meantime, his parents were more than happy to pay for all his friends to watch any pay-per-view event that came around – think OG boxing matches like Mike Tyson vs. Evander Holyfield.<\/p>\n This was a huge deal to me since my dad would never<\/em> pay a few hundred bucks for me and my friends to watch a boxing match or some other pay-per-view sporting event. I could only imagine how rich his family was. After all, they always had extra cash to spend on cars, entertainment, and basically anything else they wanted.<\/p>\n Now that I’m older, however, I know most people who spend lavishly on material possessions and “stuff” are rich but not wealthy.<\/p>\n They might earn <\/strong>a lot of money, but that’s not the same as being wealthy.<\/p>\n In fact, earning a lot of money can easily put people on the path to going broke.<\/p>\n Before I dive into all the differences between being rich and wealthy, I also want to point out that the stats are all skewed for those of us lucky enough to live in the United States. Incomes considered “poor” here could put you in the “rich” or “wealthy” categories in a number of developing countries. Plus, the American version of “rich” is basically unheard of in many regions around the globe.<\/p>\n The World Bank<\/a> classifies different countries into four different categories for analytical purposes \u2014 low income, lower-middle income, upper-middle income, and high income.<\/strong> When you look at the map on their website, you can easily see that the United States, most of Europe, and Australia are all high-income countries, whereas most of the continent of Africa and parts of Asia are considered low-income and lower-middle-income.<\/p>\n They also break down average incomes in various parts of the world, and the figures are very eye-opening. Just look at the difference between incomes in the United States and some of the other countries listed, and you’ll quickly see what I mean.<\/p>\n With this in mind, I still want to nail down what it means to be rich vs. wealthy in the United States. For the most part, being rich in the United States means:<\/p>\n How much money do you need to be considered “rich” in the United States? That figure can vary by quite a bit since all kinds of people use credit cards and loans to fund the lifestyle they want. You know the type \u2014 they work in a “regular” job where you know their salary, yet they somehow have an exotic car and a huge house.<\/p>\n People who fall into this category earn a lot of money for sure, but that doesn’t mean they always keep it. It just means they earn that much in their jobs or with their business, and that they make sure everyone around them knows it.<\/p>\n<\/blockquote>\n I have actually met people who fall in this category \u2014 a ton of people<\/strong>, in fact.<\/p>\n I still remember the story of a married couple I worked with as a financial advisor<\/a>. They each earned $250,000 per year, and they were only in their mid-thirties. My initial conversation with the couple helped me learn they wanted to retire at the age of 50, and that they were super motivated when it came to working hard for what they wanted.<\/p>\n Still, looking over all their financial accounts left me absolutely dumbfounded. While they earned half a million dollars per year, they only had $17,000 in total assets. That’s right; they were in their mid-thirties and they wanted to retire at age 50, yet they only had $17,000 in actual assets to their name!<\/p>\n This was partly due to the fact they weren’t saving or investing much at all, but it was also due to the massive amount of debt they had. They traveled a lot and they had a huge house. They also had nice cars and the boats and toys you would expect, and pretty much all of it was financed with debt.<\/p>\n<\/blockquote>\n This couple had a high income for sure, but their net worth was so low it actually shocked me. How can you calculate your own net worth<\/a>? For the most part, figuring out your net worth involves taking all the assets you own and subtracting your liabilities. Whatever is left over is your net worth, which is an excellent measure of your actual wealth.<\/p>\n Crazy enough, this couple actually had a negative net worth when you subtract all the debt they had from the assets they had. You can watch my video<\/a> on this couple here, but you probably have the gist of it already. This couple was definitely “rich” based on their income alone, but they were not wealthy at all. In fact, they had almost nothing to show for their incomes at all \u2014 at least, nothing but a mountain of debt and a pile of “stuff.”<\/p>\n Of course, this couple is not an anomaly at all. In fact, plenty of “rich” people have blown through their incomes with nothing to show for it in the end.<\/p>\n Some examples include:<\/p>\n<\/figure>\n
Table of Contents<\/h3>\n<\/div>\n
\n
Rich vs. Poor: Difference<\/h2>\n
Average Monthly Income In 2023 (USD)<\/strong><\/h3>\n
\n
\n
\n
\n
\n
\n
\n
What Does “Rich” Mean?<\/h2>\n
\n
\n
\n
\n
Being Rich Is Limited to Living a Rich Lifestyle<\/h2>\n
\n