Rich vs. Wealthy: A Personal Insight by Mike Coady
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When I look back on my journey through the financial world—from starting as a young, eager adviser to becoming the CEO of Skybound Wealth Management—one concept that consistently comes to the forefront is the nuanced difference between being rich vs wealthy. With the times we are living in with social media, we often get caught up and distracted by what we think is wealth, but is actually temporary “rich” status. This distinction isn’t just academic; it has real-world implications for how we live our lives, make decisions, and plan for the future.
My Early Understanding: The Illusion of Riches
In the early days of my career, I was often struck by the allure of wealth that so many pursued. I encountered numerous individuals who, by social standards, were undoubtedly rich. They had high-paying jobs, expensive cars, and lived in extravagant homes. Yet, as I delved deeper into their financial situations, I noticed a troubling pattern: despite their impressive incomes and outward displays of wealth, many were living on the financial edge.
This early realization was eye-opening for me. I saw firsthand how being rich often equated to living a lifestyle that was heavily dependent on continuous, active income. These individuals were working tirelessly to maintain a façade of wealth, but beneath the surface, there was a precariousness that could unravel with just one financial misstep or an unforeseen event.
For me, this was a crucial lesson. I realized that being rich was not about having a lot of money today—it was about the sustainability and security of that wealth. This was a turning point in my career and personal philosophy, where I began to distinguish between the transient nature of riches and the enduring stability of true wealth. The difference of being rich vs wealthy became very clear to me.
What It Means to Be Wealthy: A Long-Term Perspective
Wealth, as I’ve come to understand it, is far more than just having a high income or a large bank balance. It’s about having a solid financial foundation that can withstand the test of time. Wealth is built on a foundation of strategic financial planning, diversified investments, and a deep understanding of risk management.
For me, being wealthy is about security and freedom—security in knowing that my financial future is protected, and freedom to make choices without being constrained by financial limitations. It’s about having a portfolio of assets that work for me, generating income and growing in value, even when I’m not actively involved. This might include investments in real estate, stocks, bonds, or businesses that generate passive income.
Wealth is also about legacy. It’s about creating a financial structure that not only supports my lifestyle today but can be passed on to future generations, ensuring that my family is provided for long after I’m gone. This is something I take very seriously, both in my personal life and when advising my clients.
The Journey from Rich to Wealthy: A Strategic Shift
One of the most important aspects of my role as a financial adviser has been helping clients make the transition from being rich to being truly wealthy. This isn’t just about increasing their income or helping them make smart investments—it’s about changing their mindset and approach to money. It’s about helping others understand the difference of being rich vs wealthy, particularly for those expats living in places like Dubai, where so many fall into the trap of luxury living.
- Understanding Cash Flow vs. Asset Growth: A common misconception is that wealth is solely about having a high income. While income is important, it’s not the whole picture. True wealth comes from growing your assets—investing in things that increase in value over time and generate income without constant effort. This could be real estate and rental income, a diversified investment portfolio providing dividends, or a business that operates independently of your day-to-day involvement producing profits. The goal is to create multiple streams of income that don’t rely on your active participation.
- The Importance of Financial Planning: I’ve always emphasized the importance of long-term financial planning. Being wealthy means having a plan that not only addresses your current needs but also anticipates future challenges and opportunities. This involves setting clear financial goals, creating a roadmap to achieve them, and regularly reviewing and adjusting your plan as circumstances change.
For me, this planning isn’t just about numbers—it’s about aligning your financial decisions with your life goals and values. It’s about making sure that your financial plan supports the life you want to live, both now and in the future.
Wealthy individuals understand that risk is a part of life, but a risk that can be managed. Diversification is key—spreading investments across different asset classes and markets to reduce risk. This isn’t just about protecting against financial loss; it’s about ensuring that your wealth can weather economic downturns, market volatility, and other uncertainties.
In my experience, this requires a proactive approach—regularly reviewing your investments, staying informed about market trends, and being prepared to make adjustments as needed. It’s about being resilient and adaptable in the face of change.
For me, this has been a central part of my own financial strategy, and it’s something I work hard to instill in my clients. It’s about creating financial security that isn’t tied to your ability to work, so you have the freedom to focus on the things that matter most to you.
Wealth Preservation: Rich vs Wealthy
Building wealth is one thing—preserving it is another. This involves careful estate planning, tax strategies, and ensuring that your wealth can be passed on to future generations without being eroded by taxes, legal fees, or poor financial management. It’s about creating a legacy that lasts.
In my role, I’ve seen the impact that good wealth preservation strategies can have. It’s not just about protecting what you have—it’s about ensuring that your wealth continues to grow and provide for your family and loved ones long after you’re gone.
Personal Insights: Living Wealthy, Not Just Rich
On a personal level, I’ve always strived to embody the principles I advocate to my clients. For me, being wealthy isn’t just about financial success—it’s about living a life of purpose, fulfillment, and impact. It’s about using my resources to create positive change, both in my own life and in the lives of others.
I’ve had the privilege of working with many successful individuals over the years, and one thing I’ve learned is that true wealth goes beyond money. It’s about having the freedom to make choices that align with your values and goals. It’s about being able to spend time with your loved ones, pursue your passions, and make a difference in the world.
For me, this has meant not just focusing on building wealth, but also on how that wealth can be used to create a meaningful life. It’s about giving back—whether that’s through philanthropy, mentoring others, or simply being there for my family and friends.
Advice to My Clients: The Path to True Wealth
As I advise my clients, I always emphasize that the journey from rich to wealthy is one of the most important transitions they can make. It’s about shifting from a focus on short-term gains to long-term security, from income to assets, and from living for today to planning for tomorrow.
In my experience, those who make this transition successfully are the ones who approach their finances with intention and discipline. They’re proactive, not reactive; they’re focused on the big picture, not just the immediate future. They understand that wealth isn’t just about what you have—it’s about what you do with it.
In conclusion, while being rich can provide immediate gratification, being wealthy offers something far more valuable: peace of mind, freedom, and the ability to live life on your terms. This is the philosophy that has guided my career, my personal life, and the advice I give to every client I work with. It’s not just about the numbers in your bank account—it’s about the life you build with those numbers, and the legacy you leave behind. Understanding the differences of rich vs wealthy is imperative.
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About Mike Coady
Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.
Mike is an award-winning money coach and industry leader in the financial sector.
Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), a Fellow of the Association of Professional Sales (F.APS), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.
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Blog published by Mike Coady.
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