How the super rich bank differently than the rest of us (2024)

FAQs

What is the difference between the rich and the wealthy? ›

Rich people may focus more on spending and maintaining a certain lifestyle, while wealthy people may prioritize accumulating assets that produce income or appreciate in value. The distinction between rich and wealthy also lies in how they approach investments, expenses, and financial planning.

The wealthy invest in retirement consistently, and they also invest in education. They take care of their health and, more often than not, pay their healthcare bills without incurring medical debt. They also tend to purchase high-quality products and food.

While being wealthy can contribute to a healthy financial picture, financial stability refers to having control over your finances and not swimming in money. Being rich typically implies having substantial wealth or assets beyond what's necessary for financial stability, often leading to a luxurious lifestyle.

Rich Americans often have a dedicated financial team that caters to their specific banking needs. “Wealthy clients receive highly personalized banking services. This includes dedicated financial professionals who are available around the clock to handle all banking needs and provide financial advice,” Tamplin said.

Rich people see money as an opportunity, poor people see it as something to be earned. Rich people are said to make money work for them. Instead of just working and relying on income, a rich person would take a proportion of their income and invest it. Compounded interest works in favour of the rich.

If you're rich, you may buy liquid or depreciating assets. For example, you may purchase high-end sports cars or designer clothing. You can afford to buy expensive things, but these purchases don't produce income and can lose value over time. By contrast, wealthy people tend to think about the long-term.

1. JP Morgan Private Bank. “J.P. Morgan Private Bank is known for its investment services, which makes them a great option for those with millionaire status,” Kullberg said. “With J.P. Morgan, each client is given access to a panel of experts, including experienced strategists, economists and advisors.”

“On average, the wealthiest start their lives substantially richer than other households in the same cohort, own mostly private equity in their portfolios, earn higher returns, derive most of their income from dividends and capital gains, and save at higher rates,” the paper stated.

Millionaires prioritize avoiding consumer debt, making wise financial decisions, and aligning spending with long-term goals.

You'll need to earn more than half a million annually to be considered among the highest earning residents in 11 states and Washington, D.C.

How to tell if someone is rich? ›

While those terms may seem like they're the same concept, there are nuances between them, and you can be rich without being wealthy, and vice versa.

Although most adults have credit cards, millionaires are even more likely to use them. According to the Federal Reserve, almost all adults with incomes over $100,000 have a credit card in their name.

Moreover, according to a study by Bank of America, millionaires keep 55% of their wealth in stocks, mutual funds, and retirement accounts. Millionaires and billionaires keep their money in different financial and real assets, including stocks, mutual funds, and real estate.

Wealthy individuals put about 15% of their assets into fixed-income investments. These are stable investments, like bonds, that earn income over a set period of time. For example, some bonds, like Series I Savings Bonds, pay 4.3% right now and pay out the interest every six months.

For example, you may be considered rich if you're in the nation's top 1% of earners. In 2022, that group saw an average annual income from wages of $785,968—nearly 19 times higher than the bottom 90%, according to the Economic Policy Institute Open in new tab.

Some common synonyms of wealthy are affluent, opulent, and rich. While all these words mean "having goods, property, and money in abundance," wealthy stresses the possession of property and intrinsically valuable things.

The Difference between Wealth and Riches

According to Kotter “riches” correspond with self-indulgent hearts while the wealthy see themselves as stewards of God's gifts and manage their possessions in ways that honor him.

adjective. Someone who is wealthy has a large amount of money, property, or valuable possessions. ... a wealthy international businessman. Synonyms: rich, prosperous, affluent, well-off More Synonyms of wealthy.