The Man and His Wealth

by Chetwood Johnson 27 days ago in advice

The Story of going from being Rich to being Wealthy

The Man and His Wealth
Photo by Viacheslav Bublyk on Unsplash

The Myth-Financial Riches

We have all heard and listened to our elders about obtaining riches, and being in financial control, being able to pay your bills, buy a house, live the “American Dream”. Well the truth is that having riches will do all of these things for you. It even goes with the saying from rags to riches. Many of us work a 9 to 5 day in and day out to obtain riches. We build up a nice savings, have cash in our checking account, have a high credit score, a nice house and so on and so on. This is what is known as the “American Dream”.

What is the Difference-Wealth and Riches

Well let’s start with what it means to have riches. Riches is the vehicle that allows you to be financially independent. What is the the definition of independence? The actual definition is: Not depending on another for livelihood or subsistence. So let’s really get into it now, let’s get an accurate understanding of riches.

1.) We purchase a nice house (Mortgage Note)

2.) We purchase a nice car ( Car Note)

3.) We have excellent credit (We can make our payment on time)

Now what we learn from this is that having riches, and obtaining financial independence will allow us to have nice things and pay our bills on time. What are the facts. Most rich people purchase a house with a mortgage note, a car with a car note, and even though paid on time credit cards with some debt being carried on them. Now let’s look at what it means to be wealthy.

Well now that we have learned about riches, what exactly does it mean to be wealthy. Being wealthy is being totally and undoubtedly financially free. We know the definition of independence, what is the definition of free: Not under the control or in the power of another; able to act or be done as one wishes. So let’s take a look back at riches

a.) I have a nice house that I can afford, but I have a mortgage payment on it- I am under the control of the bank that loaned the cash to make the purchase.

b.) I have a nice car that I can afford, but I have a car payment- I am under the control of the finance company that financed it.

c.) I have excellent credit with high credit scores, but I’m carrying some debt on them- I am under the control of the credit card bank that issued the card.

So building wealth is the key to being totally financially free. You have total and complete control over your financial destiny. Wealth building is the process of developing a vast amount of passive income. Let’s look at wealth and net worth.

1.) I purchase a nice home (Cash)

2.) I purchase a nice car (Cash)

3.) I do all cash transactions (no credit cards needed)

The ability to have a lot of passive income, give you the ability to have a high net worth. What is net worth you ask? Well let’s get into it

NET WORTH

ASSETS

Cash on hand

Investments

Stocks and Bonds

Total Assets =

LIABILITIES

Mortgage

Credit card debt

Bad Debts

Total Liabilities =

Total Assets-Total Liabilities=Net Worth

Wealth Building-A place to Start

To gain access to wealth we have to start building passive income. How do we start building passive income? I’m glad you asked, so let’s get into it. We start by investing, the stock market is a great place to start. When we invest in established companies, we can earn dividends as the companies earn profits. There are websites that are a good starting place for beginners, such as:

RobinHood

Stash

E-Trade

TD Ameritrade

Another good way to start building wealth is investing in start-ups, there are companies out there now that have made it a lot easier to invest in start-ups such as:

Start Engine

Seed Invest

wefunder

And last but definitely not least is investing in real estate, there are also companies out there that will allow you to buy a portion of a real estate deal such as:

Fundrise

Diversy Fund

Connect Invest

I would like to take this moment to personally thank you for taking the time to read this story. I truly hope it has given you some insight on riches and wealth, and has been very informative to you. Happy Wealth Building.

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Chetwood Johnson
Chetwood Johnson
Chetwood Johnson

I am an innovator, entrepreneur, and critical thinker. I like to give people inspiration and ideas to make there life better. I started my journey in 2007 as I opened my first business in the dawn of the recession.

See all posts by Chetwood Johnson