I learnt very early on in life that being rich is not the same as being wealthy.

I had a lot of friends who were rich. Their focus would be to spend on parties, gadgets, travelling with a perspective of signalling. 

But after a few years, I realized that many of them had no savings and lived month to month.

These were friends who were earning much higher incomes than on average in India. I would be puzzled as to how this was happening. 

They were focused on being rich rather than being wealthy. 

Rich people are those people who have money and want to spend it. Wealthy people are those who have money and want to put it to work. 

I never cared about being rich. 

Very different from my friends, I focused quite heavily on two things. The first was to keep getting better as a professional. The second was how to keep increasing my savings rate. 

Everyone around me focused on being rich, and how to buy things that made them “richer”.

This would involve flashy new investments, in the form of stocks or crypto. Time would be spent on getting better returns from what they had. 

Few people would be focused on actually increasing the base which they had.

Building wealth is a mindset. It involves thinking long term. It needs a lot of control. The earlier you start thinking with this mindset, the better it is.

It’s not easy. 

Long term thinking involves building skills that may not be immediately useful. Many times, long term thinking also involves building character and grit. 

Control is a big component in the latter. 

Saving, when everyone is spending their money, is also not easy. It requires control and only spending on things that matter. 

With money, I have realized that there is not a lot we need to do our basics. Beyond a point, the rest is to just keep score. 

The beauty of when these two forces get together is that they are incredibly powerful. 

For me personally, reaching a level where your wealth returns enough to cover your expenses is true wealth. That is the meaning of financial independence.

You can then make decisions without the monetary overhang

Compounding begins to start playing in when these two forces play with each other. The forces are powerful.

A wealth of 5 Cr returning just 8% every year is 40 lakhs, a fairly high income. You can’t get there by getting rich.

You get there by getting wealthy.