And why understanding both changes everything.
Rich. Wealthy. I hear these two words thrown around all the time.
Often interchangeably. Without most of us really stopping to understand whether they actually mean the same thing. They get confused with meaning the same thing, because on the surface they sound like they do.
Honestly, they don’t. Even I spent some time properly working out the difference. Considering I spent five years training as an accountant and submerging myself into understanding financial education and literacy. So I can see how people can easily misinterpret the two.
However the difference between them is one of the most useful things you can understand about money.
If you haven’t read our first money mindset receipt yet, “Unpopular opinion: everyone wants to be rich”, we’d recommend starting there. It covers the RGR definition of rich and why your definition of it will change over time. But if you want to keep going - we’ve got you. 🖤
Rich - what it actually means
Rich is almost always about income and lifestyle.
It’s the salary. The amount you can afford. Having the ability to spend. The feeling of genuine financial ease in the day to day. Paying for dinner without having to check the bill. Booking the holiday without always calculating internally whether you have the money, or better yet, even afford to take the trip.
Rich is about the here and now. It’s about what flows in and what it allows you to do right now.
If you’ve read our first receipt you’ll know RGR defines rich as being ‘Rich in Mind, Rich in Body, Rich in Bank Account’.
All three in that order. One cannot make you rich without the other two. All three together allows for financial ease.
However, in the financial sense - being rich is about your income and lifestyle you choose to lead. It’s the flow. The present tense.
And here’s the thing about rich that most people don’t often say out loud.
You can earn a very high income and have almost nothing to show for it. A £100,000 salary spent to £0 every month is rich in feeling but broke in reality. I’ve seen this up close in my work. High earners with nothing underneath. It’s more common than the lifestyle suggests.
The money comes in. The money goes out. And nothing accumulates underneath.
That’s where wealth comes in.
Wealthy - the proper definition
Wealth is different. It’s not about what flows in. It’s about what you’ve built and what you own.
The formal definition:
Wealth = Assets less Liabilities
Assets are things you own that hold value over time.
Liabilities are things you owe that cost you.
This is honestly one of the most useful calculations you’ll ever do for your finances. It may look simple. But it’s significant.
In simple terms:
Assets include:
Cash and savings
Property you own
Stocks and shares investments
The value of a pension pot
A business you own
Other investments
Liabilities include:
Outstanding mortgage balance
Credit card debt
Personal loans
Car finance
Student loan balance
Any other debt you owe
The gap between those two numbers is your net worth. That is your wealth position today.
Here’s what that looks like.
The receipt for calculating your net worth
Can you be rich but not wealthy?
Simply, yes. And it’s more common than people realise.
Earning a high income. High amounts of spending.
Low or no savings.
No investments.
No assets accumulating.
The money flows in. The money flows right back out.
The net worth stays flat or grows very slowly.
As we say ‘Rich in feel’.
Not building wealth.
The lifestyle looks impressive from the outside. But impressive and secure are two different things. The reality is that if the income stopped tomorrow - there would be very little underneath to live on.
This is why income alone is never the full picture. If anything goes wrong - redundancy, illness, an unexpected bill - there’s very little underneath to fall back on.
Earning more is essential - and the Earn More receipts cover exactly that. But earning more and spending all of it builds ‘rich’, not wealth.
The wealthy version of the same income looks different:
Same high income.
Intentional spending.
Regular ISA contributions.
Pension contributions maximised.
Assets accumulating.
Net worth growing every year.
Rich in income. Building wealth underneath it.
Same money. Different outcome. The difference is what happens to the portion you don’t spend. And being intentional with it.
Can you be wealthy but not rich?
Yes. And this one seems to surprise many people.
Once you understand what it takes, it’s more achievable than most people think.
Through a modest income.
Low spending.
Allowing compounding to grow your investments.
Owning property that has appreciated.
Having a pension pot that has compounded.
Net worth: significant.
Monthly cash flow: modest.
Wealthy but not high income.
This is the quietly wealthy person. The one who never looked particularly rich, but followed the right principles for long enough that the compounding did its work. Their net worth tells a completely different story to their lifestyle.
Both routes exist. Both are possible. Most people want elements of both.
And honestly - most of us are somewhere in the messy middle. Building one, neglecting the other and trying to figure out the balance. That’s normal. That’s where the work starts.
What should I actually be building toward?
Both. Always both. But the right order is what’s most important. Because skipping stages is where most people go wrong.
I’ve done it. It cost me time. And time can be a huge receipt to pay. So this receipt might save you the time I cannot get back.
STAGE 1 - Foundations
This is so important. Get the basics in place before anything else as everything else is built on top of this.
Having that emergency fund.
Clearing your high interest debt.
Building a budget that works.
This is the Personal Finance Basics receipt.
Start there if you haven’t already. 🖤
STAGE 2 - Grow your income
Your salary is your biggest wealth building tool right now.
It allows the space to put your money in places that work for you.
A higher salary can mean more to save, invest and build with.
Negotiate it. Review it. Build additional income streams.
The more coming in means more available to build with.
STAGE 3 - Build assets
This is where your money starts working harder than you have to. It grows in your sleep. Compounding quietly in the background.
ISAs, your pension pot, property, other investments.
This is where rich starts becoming wealthy.
STAGE 4 - Grow net worth
The gap between your assets and liabilities will start to widen.
Keep contributing. Keep investing. Let compounding do its work.
Most people never reach this stage. Not because they couldn’t, but because they never got Stage 1, the basics, right first.
That’s the wealth building receipt.
And it starts with Stage 1 regardless of where you are.
Should I have a wealth goal?
We believe everyone should have a wealth goal. But it shouldn’t be a random number.
Questions worth sitting with:
At what age do you want to consider stop working or ease up on work?
What does your ideal retirement actually cost per year? How much would you hope to spend per year?
What would financial freedom actually look like for you - in your life, not someone else’s version of it? You have to be honest with yourself for this to work.
That clarity is what turns vague good intentions into an actual plan.
You don’t need to have it all figured out today.
But starting to ask the right questions today is how the answers eventually arrive.
Here’s mine. I want the option to work because I choose to, not because I have to, by the time I’m 45. That number drives every financial decision I make right now. So I’m focusing on building my pension pot, accumulating assets and growing my income. What’s yours?
The one thing to remember
Rich and wealthy are not the same thing
Rich is the income, lifestyle and present.
Wealth is about the future. What you’ve built underneath it.
The goal for most of us is both.
Rich enough in the present to live a life that feels genuinely full. Wealthy enough underneath that the future feels genuinely secure and less scary.
And the receipt for getting there is always the same - understand where you are, decide where you want to go, and build consistently in the right direction.
Right. Go calculate your net worth. Honestly.
We’ll be here when you get back. 🖤
Your homework 🖤
Here’s your homework for this week. Three things:
Calculate your net worth using the receipt above.
Assets minus liabilities.
Write the number down.
That’s your starting point.
Identify your biggest liability right now. What is it costing you in interest? Is clearing it a priority?
Unnecessary debt can be the biggest quiet cost to your building wealth. Know your rates and have a plan.
Identify your biggest asset building opportunity.
Don’t have an ISA open? Open it.
Your pension contributions are at minimum? Increase them.
Research other potential investments.
One action. This week.
This is where your wealth journey starts. One step at a time.
This content is for educational purposes only and does not constitute financial advice. Net worth calculations are illustrative. PLSA retirement standards referenced are from the Pensions and Lifetime Savings Association Retirement Living Standards 2025. Your individual financial position will depend on your personal circumstances. Always consult a qualified financial adviser for personalised guidance.
Every Rich Girl Starts Somewhere.
Editor x
Sources:
Net worth and wealth definitions - widely documented financial education principles
ISA and pension guidance - gov.uk / HMRC, 2026/27
