Definition
A wealthy person earns a high passive income and has a high net worth with more assets than liabilities while a rich person earns a high active income and has a low net worth with more liabilities than assets.
Personalities
Best example of a wealthy person is James Mwangi of Equity, recently he was the highest paid individual with Kshs 640M dividend payout and Also Manu Chandarana of Comcraft, the owner of Safal Group, the biggest roofing sheets company in Africa
An example of a rich person is Mwenda Thuranira of My space. He has perfected the act of acquiring big loans from banks to finance his lifestyle due getting high commissions from Key account clients like Naivas, KFC, Chandarana, Total, Rubis, Goodlife and KFC.
Terminologies
Passive income is a type of income that is acquired automatically with minimal labor to earn or maintain. Active income is salary earned from specific duties or services rendered according to an agreed task, within a specified time frame Net worth is the value of the individual’s assets minus liabilities Assets are items owned by a person or company, regarded as having value to meet debts, Liabilities are owed debts that someone is responsible to pay
My opinion
Wealthy person
I have realized many fail to differentiate between being wealthy and rich
Mimi najua a wealthy person is someone who owns companies but his main job is to provide strategic planning and review the performance of the company
He normally owns several companies and his day to day job is to source for key account businesses and meet his CEOs and CFOs to be briefed on what is happening to his businesses
He normally doesn’t earn a salary but a percentage of the profits as per his stake in company shares
He also owns assets. He also earns from the assets that he doesn’t use for personal use.
He gets loan term loans to mostly under his companies to expand his business to be competitive or buy his competition.
He never buys assets to leave it idle waiting for appreciation then sell at a higher price. He would rather put a money generating business on the idle assets
Wealthy people should have a no nonsense attitude to kill competition, avoid hostile takeover of their company and influential political people
Rich person
They earns a high salary through a job or a business but needs to be present their everyday to be paid
He has other side hustles but only the income pays they supplementary bills but can’t pay his main bills or acquire an assets
He always servicing a loan mostly to acquire an asset. The loan is mostly taken with an asset which most of the time has no income generating activity that mostly cannot fully pay the loan without looking for other sources of income
Most their business Ventures where they are not there tend to be mismanaged and collapse.
When they retire, most of their businesses have collapsed and the income they are earning has big difference compared when they used to work
Conclusion
The fact remains is that you need to be first rich so that to be wealthy.
The transition will lead to loosing a lot of close friends because the wealthier you become also your circle of friends also change
Being wealthy is an attitude and mindset that is not easy to achieve but once you grasp the concept and adjust your personal character to be emotionally and physically prepared to run an empire making a minimum of $1M annually
