You might be thinking this is very simple and I do not need to learn the difference. But before you move-on, wait there is a big difference that you should know to be wealthy and happy.
Who is a rich person?
- The person who owns a big house, the latest apple mobile phone, a big car or has a lot of money to spend.
- The person who earns more than 10 lakh INR or 20 lakh INR or more than 50 lakh INR.
- Descendent of a rich parent or someone with lucky investment or good connections.
Such a simple question but it often leads to confusing and inappropriate replies. Yes, it is confusing but what is the correct answer?
Whatever your answer may be, you are wrong and need to change your thinking. We often mistakenly assume that in order to become rich we should earn more so that we can spend more. Let’s answer another question to understand what it means to be rich.
Suppose you make 16,00,000 INR per year and how much should you spend to be called as actually rich?
- Spend less than 16,00,000 INR.
- Spend everything.
- Spend more than 16,00,000 INR
- Spend according to your financial plan and strategy.
If you squander everything you earn then you are rich. It does not matter how much you earn. A rich person only has money for short time till it gets over. This is where most people fail and make wrong choices.
If you spend more than what you make, then you are extravagant and a fool.
If you spend less than what you make then you are wise. But if you spend as per a financial plan and strategy then you will have the financial freedom to make life choices that lead to happiness backed by a comfortable saving cushion. This makes you wealthy. A wealthy person not only knows how to make money but also how to create wealth and stays wealthy for generations.
A disciplined approach, decisions, and behavior is required to be wealthy and happy. In the next blog, we will learn about them.
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