Being Rich vs. Being Wealthy: What’s the Difference?

It’s all about where you put the zeros — having a large bank account isn’t the same as having zero regrets and focusing on what brings you joy.

A group of older women in a retirement community play a board game.
(Image credit: Getty Images)

As a financial adviser, one of the topics that I often talk about is being rich vs. being wealthy. While those terms may seem like they’re the same concept, there are nuances between them, and you can be rich without being wealthy, and vice versa.

What I’ve also found, is that the difference between being rich and being wealthy comes down to where you have the most zeros.

For most people, when they think of the word rich, they’re likely thinking of assets — money, real estate, etc. And while there is nothing wrong with growing your assets (I’ve even made a career out of helping people do just that), at the end of the day, no one cares about how much you’re worth and how much money you make.

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Harvard (opens in new tab) has conducted a long-running study, since 1938, that followed 724 teenagers from their youth to their retirement. The happiest among those who were retired had similar traits when it came to their mindset, not their bank account.

This study suggested that there was an association between connections, such as your social circle, and happiness when you reach retirement age — and you don’t find that in the zeros of your bank account. The thing that those in the study missed the most about their working years wasn’t the work or making money either — it was the connections with those around them.

In Retirement, Discussion Turns to Pleasures Rather Than Worth

I recently visited my mother at her retirement community in Florida, and not once did anyone talk about their career, their worth or what they did for a living. While they all had to be some level of “rich” to be living in this particular retirement community, this wasn’t a topic of discussion.

They spent their time talking about their hobbies, their grandkids and what they enjoyed doing with their lives.

That’s the difference between being rich and being wealthy — being rich means adding more zeros to your bank account. Being wealthy is about living your live with zero regrets, zero jealousy and focusing on what brings you joy and happiness.

In my experience, the happiest people I know are the wealthiest, and it has nothing to do with how much is in their bank accounts.

One of my favorite phrases is “money is a catalyst” because once you hit a certain income level where you are living comfortably, money is just money. If you’re a happy person living with an income of $100,000 per year, an income of $500,000 isn’t going to change your happiness level drastically. The opposite is true here, too — if you are miserable earning $100,000 per year, $500,000 isn’t going to suddenly make you a happy person.

Obviously, this is only true when you’re living at a level where you’re earning enough that your needs are being met.

Money Alone Won’t Make You Happy

Some of the wealthiest people I know, with the largest bank balances, are also the most miserable. Money alone won’t make you happy, and it’s likely that if you’re a happy person earning a modest amount, you’d still be a happy person if you’re rich. The same goes for someone who’s miserable — they’d be miserable if they were middle-income or rich.

When it comes down to it, happiness isn’t reliant upon how many zeros are in your bank account. It takes effort to reframe your thoughts and find what truly makes you happy and to refocus and prioritize your decision-making around that.

Prioritizing what makes you happy may lead you into retirement being truly wealthy, where you can focus on the social connections that the Harvard study found so important to happiness.

Diversified, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: (opens in new tab). Investments in securities involve risk, including the possible loss of principal. The information on this website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab).

Andrew Rosen, CFP®, CEP
President, Partner and Financial Adviser, Diversified, LLC

In March 2010, Andrew Rosen joined Diversified (opens in new tab), bringing with him nine years of financial industry experience.  As a financial planner, Andrew forges lifelong relationships with clients, coaching them through all stages of life. He has obtained his Series 6, 7 and 63, along with property/casualty and health/life insurance licenses.