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Would You Rather Be Rich or Wealthy?

Christopher N. Sorce, CFP®

09/10/2020 — Download

In a recent meeting with a new client, I asked him when he wanted to retire. “Never,” he said. “I love what I do.” So I rephrased the question: “When do you want to be financially well off enough that if you chose to retire you could?”

The difference between wanting or not wanting to retire at a certain age and being able to retire goes to the heart of the distinction between being wealthy and rich.

But isn’t that just a matter of semantics? Aren’t rich and wealthy the same thing?

Research the topic and you’ll find a variety of definitions for both—and usually, the terms are used interchangeably. Some define it by income, starting at $100,000 annual earnings but more frequently at $250,000 or more. A poll by SeniorLiving.org determined rich/wealthy was about net worth—at least $2.3 million.

At HBKS Wealth Advisors, we see a distinction between the two. A rich household enjoys a substantial annual income and all the trappings: multiple cars, a nice house—perhaps a second home—expensive schools for the kids, and travel to exotic destinations. Wealthy, however, is about having enough money to maintain your lifestyle without working. The amount of money you have is not what determines whether or not you are wealthy; it’s having enough to not have to earn more.

Two things work: people and money. If you are in your accumulation years, you want to put your money to work. In 1992, I met with a doctor just starting his career. He and his wife had the first of what would be three children. Over the years, they made more than enough money to live well. They also followed a financial plan that we updated every year. Now they are retiring. They were rich all those years; today they are wealthy.

At HBKS we want to make our clients wealthy. So if they choose to retire, or they lose their job or business, or they live longer than they expected, or become disabled, they’ll have enough money. We want to help them through the accumulation phase of their lives to being independent when retirement is available and work is optional. Our goal is to take them through living a rich life to enjoying a wealthy retirement.

IMPORTANT DISCLOSURES

The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.

Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.

The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.


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