Would You Rather Be Rich Or Wealthy? Why It's A Thin Green Line

Would you rather be rich or wealthy?
If you’re like most people, you’re probably thinking, “What’s the difference?”
Turns out it has less to do with your assets and more to do with your mind-set, claims New York Times columnist Paul Sullivan, author of “The Thin Green Line: Money Secrets of the Super Wealthy.”
Those who are wealthy, Sullivan asserts in his new book, have achieved financial security because they’re in control of their money.
The rich, by contrast, may have more zeros at the end of their paychecks—but they have far more precarious financial situations.
Curious to learn more about this wealthy-rich divide, we caught up with Sullivan to better understand how each camp’s money behaviors truly differ—and what strategies we can possibly adopt, even if we aren’t members of the millionaire’s club.


LearnVest: So what is the ‘thin green line’?
Paul Sullivan: It’s an organizing principle that came to me midway through writing the book: It’s a line that divides wealthy people from rich people, poor people and just about everyone else.
You can think of it like a classic stock chart—it starts low, goes high, is a little jagged, and you can see the dips here and there. I thought that would be a decent concept to help people visualize the financial decisions they were going to make throughout life.

Can you elaborate on the difference between the ‘wealthy’ and the ‘rich’?
Here’s an example that may help illustrate it. You could be young and just starting out in the workforce, not making a ton of money. Maybe you have student loan debt, and you don’t have a house or much savings, but you’re making the correct [financial] decisions relative to your age and income.

That in and of itself would put you on the right side—the wealthy side—of the thin green line.

Another example might be a retired schoolteacher. She spent 30 or 40 years working, saved $100,000, paid off her house, and has a pension. She likes to go out with her friends, takes one or two trips a year, and volunteers. She’s also on the right side of the thin green line.
On the other hand, you might have a hedge fund manager who has a giant house, multiple cars and a second home—but he’s overleveraged. If something goes wrong, he could end up losing everything.
And things don’t even have to go wrong—they could simply not go right enough. Maybe his bonus is not what he expected, so all the decisions he’s made [assuming he’d get the bonus] could cost him. Even though he has a very high salary, he’s on the wrong side of the thin green line.