Rich vs Wealthy: The Most Important Money Lesson

If you asked your child whether they wanted to be poor, rich or wealthy, what do you think they'd say?

Most children would quickly answer that they don't want to be poor. They understand that being poor means not having enough money for the things you need. Although I would say that many adults feel poor because they can't afford everything they want, but that's a topic for another blog.

When it comes to being rich or wealthy, many kids believe they mean exactly the same thing.

They don't.

In fact, I believe understanding the difference between being rich and being wealthy is one of the most important money lessons we can ever teach a child. Before I explain why, let's me set out the difference between Rich and Wealthy.

What is the difference between being Rich vs being Wealthy?

RICH is something we can all see.

It's people who have earned or been given money and use it to buy things they want, not just what they need. Social media is full of examples of people showing off fancy cars, designer clothes and luxury holidays. It all looks amazing.

One of the most powerful ways to engage your kids on this topic is to get them to think of money like seeds. Rich people exchange their seeds for things they want today.

Being WEALTHY is different.

Wealthy people also enjoy spending their money, but they keep some aside for the future. That money becomes a safety net for unexpected expenses such as losing a job, paying hospital bills or dealing with life's surprises. They also invest some of it so it can grow and provide an extra income over time.

Going back to the seed analogy, wealthy people plant some of their seeds. Over time those seeds grow into trees that produce even more seeds.

As I often say to my kids, wealthy people have their own Financial Forest, whereas the Rich don't.

The important thing is that no one else can see it.

That's why rich often looks more impressive in the short term. We see what people spend. We don't see what they've saved or invested.

Rich is visible. Wealth is invisible.

The statement above is super important. If we don't teach our kids about 'being wealthy', they won't know about it and just want to be rich.

Read more: You can read about the turbulent life of MC Hammer, who went from poor to rich, then back to poor before eventually rebuilding his finances and becoming wealthy: MC Hammer Story

The Most Important Money Lesson

I often see people asking, "What's the most important money lesson to teach children?"

The answers from various people usually include saving, debt, budgeting or compound interest. These are all incredibly important topics.

However, simply knowing about them doesn't necessarily change behaviour.

Most adults already know that credit card debt is expensive, yet many still overspend because they want to look rich today instead of becoming wealthy tomorrow.

Knowledge isn't usually the problem. Behaviour is.

That's why I believe teaching children the difference between being rich and being wealthy is so powerful.

Once a child understands and decides they want to become wealthy, many of their future decisions become easier.

They know they need to plant some of their seeds rather than spend them all. They become less likely to overspend. They're less tempted to use debt to buy things they don't need. They become interested in growing their money.

Most importantly, they begin to care less about impressing other people and more about quietly building their own financial forest.

What About Children Growing Up Poor?

Some children grow up in families that genuinely struggle with money. For them, becoming wealthy can feel like something that only happens to other people.

One of the greatest gifts we can give these children is the belief that building wealth is possible. Not guaranteed but possible.

They may never become millionaires, but believing it's achievable encourages them to learn new skills, look for opportunities, earn honestly, save consistently and invest patiently.

Every person who became wealthy started by planting their very first seed. That's why I believe this lesson is so important.

It's one of the few money lessons that appears in both Grandpa's Fortune Fables and Frankie Fortune.

Because once a child understands the difference between looking rich and becoming wealthy, it doesn't just change what they know about money. It changes how they think about money. And that can change their future.

I hope you talk to your kids about Rich vs Wealthy and share this blog with other families so they talk to their kids about money. They can subscribe here

Once they understand what wealthy means, you can then help them become wealthy by folowing the 3 Rules of Wealth which you can learn more about here or in my book Grandpa's Fortune Fables.

Thanks for reading,

Will

p.s., If you (or your kids) have read either Grandpa's Fortune Fables or Frankie Fortune, it would mean the world to me if you could leave a review online to help them reach more families. Available on Amazon.