"What's the worst thing about being a billionaire? Nothing. Nothing at all. But then I look at people and go, damn! They have so much more money than me; then I kind of catch myself and say, shut the **** up, you idiot"
- Mark Cuban
Mark Cuban's net worth for 2019 is $4.1 Billion.
Come and let us find out the real meaning of wealth! According to the Merriam-Webster dictionary, wealth means "abundance of valuable material possessions or resources".
Take Fred and John as an example. Fred recently got promoted as the captain of a big cruise ship, and he earns $20,000 every month from his salary. Fred recently bought a house and lot from a high-end neighborhood, purchased a luxury car, treats his family with signature clothes, and sends his kids to a nice school. In other words, the salary of Fred is going down the drain.
John is an entrepreneur and makes around $5,000 a month. John lives frugally and reinvests more than 50% of his earnings each month to his business and in different profitable ventures. Over the years, John doubled his earnings; and now makes more than $10,000 a month. John became more provident than before, he is now reinvesting more than 70% of his income and continues to live a low profile status with his family.
After 10 years, Fred barely saved money and he only had minimal investments. Fred plans to work for another 10 more years for his retirement fund. On the flip side, John grew exponentially and he continues to use the same formula for the upcoming years.
All of a sudden, a great recession came. Both Fred and John were hit and severely got affected. Fred lost his job; he is not yet done with the house mortgage and is currently under threat by foreclosure, and his children are still in college.
John was forced to close his businesses and liquidate some of his investments to support his family. The bright side for John is that he has more than enough resources to cover all his expenses because of his frugal lifestyle; he can afford to survive for years to come without the pressure of making money right away.
If you lose your job or business right now, how long can you sustain your lifestyle: 3 months? 6 months? 1 year? 1 day?
This is Now what Separates the Wealthy and the Rich
A wealthy person has a sustainable fund and a passive income, even if they stop working today, they know that they are secured and completely fine; while the rich rely merely on money and will only be "rich" for some time until that money is gone. This is also the reason why some of the lottery winners go broke and bankrupt even after winning the mega jackpot - they must have thought that "this money is so many, it will never run out".
Every individual may always be different in terms of how much money they have, and having more money than others does not necessarily make you wealthier than others. A five-year-old kid can feel "wealthier" than a 30-year-old, self-sufficient/well-paid salesman. Even if the salesman has more money than the kid, he worries that his expenses are catching up with his income. On the other hand, the five-year-old kid feels more secured through his "passive income" which is his Mom and Dad.