It’s Better to Be Wealthy than Rich: The Way to Wealth

It’s Better to Be Wealthy than Rich: The Way to Wealth

I now realize that I spent years going about pursuing my financial independence backwards. I wanted to be rich before becoming wealthy. I thought more money would solve all of my financial issues. I ended up just trading up to bigger and fancier hamster wheels. I was trapped in the rat race.

It took decades for me to get it through my thick skull that wealth equals financial independence. Time affluence is the goal.

Everybody wants to be rich. Money will solve all our problems. Being rich will finally put to rest our self-doubt and silence all those who said we wouldn’t amount to anything. Being rich is the way to inoculate ourselves against the anger we feel towards those who screwed us. Being rich is the perfect revenge. These are motivations of questionable ultimate worth.

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

Naval Ravikant

One thing for sure being rich definitely beats being poor.

What does it mean to be rich? When do we know we have achieved it? The goal posts tend to move the more we make and have.

The threshold of being rich is subjective and vague. We all define it differently.

Being rich can mean owning status symbols. To some being rich means having a private jet, jewelry, mansion, cars, the admiration of those we meet, sexual attraction, a yacht, etc.

It’s difficult to construct a life that makes sense from things we find in gift shops.

Being rich is related to a number: a millionaire or a billionaire. Is a million dollars in the bank enough or do we need ten or a hundred to finance our dream lifestyle? It is a moving target when we compare ourselves to others with more.

Comparison is the death of joy.

Ralph Waldo Emerson

You can blow past numbers pursuing an ever-receding horizon. Instead of enjoying what you have you end up chasing your tail.

Chasing money turns into fanaticism.

Fanaticism consists in redoubling your efforts when you have forgotten your aim.
— George Santayana

If you don’t know where you are going you will never arrive. Being rich is too squishy and vague a goal. We need a clear, rational and measurable goal for achieving financial independence.

A clear way to think about financial independence is in terms of wealth. What does it mean to be wealthy?

Buckminster Fuller was one of the great inventors and visionaries of the 20th century. He defined wealth not in money, but in time. Dr. Fuller defined wealth as: “A person’s ability to survive X number of days forward.”

This is a measure of time affluence.

This definition requires having a budget of how much you need to spend each month to live. Then you divide that number by your savings and liquid investments and you come up with how many months or years you can live on your current resources.

Entrepreneurs call this concept Runway. It’s a measure of how long their startup can survive on the cash they have in the bank.

I say liquid investments because that is an important term. How much money can you sell something for today is its liquid value. Stocks in public companies are easy to sell and you know the price every trading day. Marketable securities like stocks have liquidity.

Trying to quickly sell something you own like a car or bike or BBQ grill to raise money probably won’t bring as much as you hoped. Not all assets are created equal.

Some things you think are assets are actually liabilities. All those status symbols you collected probably will only bring a fraction of what you paid for them. A new car loses 25% of its value the moment you drive it off the lot.

Measuring being rich in status symbols and toys is financially risky. These things are not assets. They are liabilities. The things you own end up owning you.

The great Chinese philosopher Xunzi said, “The gentleman makes things his servants. The petty man is servant to things.”

They certainly can keep you chained to the rat race treadmill. Ebay is a great tool for turning stuff you don’t need or use into cash. Invest that cash in assets that will put you closer to your goal of financial independence.

How long you can survive on savings is always a finite amount of time. The amount of money is fixed and being depleted. The way to extend the length of time is by owning assets that make money 24/7 while you sleep.

These assets called are income-producing assets. They are the ones that put money in your bank account. These are things like rental properties, stock dividends, and bond interest.

If we take Bucky Fuller’s definition that wealth is how long you can go, then being wealthy is a permanent state of wealth. Being wealthy represents the critical mass number where you cover your monthly nut with investment income.

Joseph Heller, the author of Catch 22 once had an exchange with Kurt Vonnegut that illustrates my point. Vonnegut mentioned to Heller about how a rich guy they both knew made more money that week than Catch 22 would make in a lifetime. “I have something he’ll never have,” Heller replied. “Enough.”

Financial independence means having enough. It is having enough monthly income from income producing assets to cover your living expenses. When you reach that magic number you are free from the rat race and never have to work for a living ever again. That is a clear, measurable and very desirable goal.

Henry David Thoreau said a person is wealthy in proportion to the number of things that they can afford to let alone.

That is an eloquent statement of the concept of fuck you money. The goal is to be able to spend your days and nights as you see fit. The goal is to never have to worry about job security or kissing up to a bad boss. It is the ability to say take this job and shove it.

It’s about living in a state of time affluence where you don’t need to feel rushed or stressed by time constraints. Its about eliminating that middle of the night panic about losing your job and being unable to pay your bills.

When you aren’t working on someone else’s priorities and timetables, you can finally take the time and find out who you really are and what you like doing. That is the fundamental goal of living.

“Freedom is the only worthy goal in life. It is won by disregarding things that lie beyond our control.”


Practice patience, discipline, and consistency in pursuit of your wealth goal. This is a long game.

Come up with your number and set your investment goal. Reduce your monthly number to what is essential. Don’t eliminate all fun but examine what might be masquerading as fun and is actually self-destructive.

Strip away all your bad habits that are eating up your money. Bad habits are anything you do repeatedly that no longer serves you. Identifying and dealing with these areas of life take being reflective and honest with yourself. Its only with the perspective of hindsight that I have become aware of the vast network of rationalizations and excuses I came up with in order to continue allowing poor habits to dilute my efforts. It’s not easy. This is hard work.

That money you save reduces the amount you need to generate each month. This includes smoking, drinking, eating out, subscriptions, memberships, and cable TV bills. Invest that money towards your goal. Oh, and first, ditch your credit card debt.

Once you have your cleaned up stripped down monthly budget you can think about investment income. You can easily make 5% on your money. There are quality stocks that have more than a 5% dividend yield so there is one place to get that kind of return. Educate yourself on stock market and real estate investing. You can make more than 5% as you become experienced.

Start with a small goal. Try to invest enough to give you $100 a month in income. Make new milestones as you meet your goals until you achieve escape velocity.

That is the ultimate goal. After you reach basic financial independence you can take advantage of opportunities and put your time to use creating assets that will pay off over the long run.

Now that you are operating with a safety net you can indulge in more risky opportunities that have bigger potential payoffs. You can increase your appetite for financial risk and still sleep at night. You can afford to lose money from these ventures and learn from the experience. I don’t know any rich people who haven’t lost money.

Not all your investments will make money. You can’t win by playing not to lose.

Embrace the possibility of failure and learn from it. The gains in experience are priceless and will aid you as you go forward.

Financial independence allows you to detach from outcomes and focus on the process of being successful. This will allow you mind to open up to creativity and see options and opportunities.

This is the advice I would give my younger self. And this is the advice I think my happiest older self is giving to me now. Take a minute to see if your older wiser self, the happiest version of your eighty-year-old self, is giving you similar advice. If it resonates, get busy.

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