Saturday, November 03, 2007

Rich versus Wealthy...

So on a message board someone asked what's the difference between rich versus wealthy? Rich people spend their money in 1 generation, maybe 2 if they are lucky. Wealthy people pass it on for generations building upon it. I thought interesting way to look at it. This was referring to the press article about Britney Spear's spending habits.

Spears is just another star spending lavishly. However the question arises how long can she keep up this lifestyle? The really rich person is probably the one managing her money and writing her a check. Hence she's rich, but the other guy is probably wealthy.

To further the example her ex-hubby K-Fed made $500k last year in endorsements but only grossed $7500 after expenses. How does he maintain the lavish lifestyle? He had got $22k/month in spousal support and $15k/month in child support. But soon that will end and what will he live on? Another case of being rich, but not wealthy?

Is that an adequate description of rich versus wealthy?


Fabulously Broke in the City said...

I think so.

Her spending habits and lack of savings/investments made me (albeit guiltily) feel better about myself.

You would think her accountant/advisor would have automatically organized her money for her... but then again, is she blowing the $s out of proportion because of the battle?

Living Almost Large said...

Money doesn't buy happiness. It seems to give some people a better life and others it ruins.

MEG said...

Rich is when you get a windfall that may not be maintainable (a lottery winning, a short-term athletic career, etc). Wealthy is when you have built up sufficient assets to provide income to you and your heirs for many decades, if not generations.

I have to think that Brittany's money is more like wealth than richness. Her royalties--even if she never produces another record--will last many many years. Her grandchildren will likely be receiving large checks on her behalf.

Plus, she's still working. Her newest album is selling incredibly well. And she's young. Who knows what else she could do? She could easily gross a few million just by telling some lackey to come up with a perfume, a clothing line, a workout video, or whatever else.

So as unfair as it may seem, Brittany Spears is wealthy, plain and simple. She'd be hard pressed to spend all her income, or to rid herself of her passive income. She earns $9MM a year for crying out loud--and that's the most recent years when her reputation has been terrible and she hasn't been doing anything! It's hard to blow that kind of money and have nothing left to show for it (even if it is materialistic things like houses, cars, jewelry, etc).

Living Almost Large said...

I don't know she's spending $750k/month or $9M a year. I don't think her lifestyle will decrease but rather her earnings will decrease.

Yes she has royalties, but how many musicians have financial troubles? Even actors. MC Hammer, Mike Tyson, etc. There are tons it appears.

I don't know what she'll do as she spends more and more getting older but less income generation.

johnstonteam said...

You're right. Money doesn't buy happiness. But it's a hell of good down payment.

Seriously, those who know that life is more than about greed and self indulgence will find greater happiness with money. The Britney's and Anna Nicole's of the world will only find that money will fuel their demise.