As far as I know, and from a general perspective, "building wealth" seems identical to the term "making money." I am confused because investing generally isn't about making money in the same sense as one making money for completing a task (although most people do make money investing).

I am wondering since my credit card company offered me a complimentary phone session with them regarding investing (for example, they want to discuss how they can match me with an adviser; help me better structure my investments; reach certain goals with more affinity to them; etc.).

I noticed on my credit card issuer's site a message that reads something similar to this:

The first step to being successful with investing is with building wealth. Plan your investments with your preferred risk-tolerance & we'll help you reach your goals for the future, retirement, etc.

Basically, what does "building wealth" mean here exactly? The wealth built-upon from my investments, or the wealth I'm going to use for the investing in the first place? How should I make sense of this?

So I can just tell the adviser something like:

Hey! I'd like to succeed in strategies for building more wealth. Can you give me a couple of millions worth of wealth so that I can put the money in a money market account and live solely off the interest? Thanks and happy earnings to my massive pile of wealth. Also, you handle it all for me.

Forgive the harsh example, but how else would I be expected to understand this?

Wealth from investing? Wealth to invest? Wealth to invest and wealth from investing?

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    @quid "Rich = high earned income" I would say Wealth = net worth and Rich = high net worth . You can have a high earned income and piss it away and/or have piles of debt. But it's a semantic argument...
    – D Stanley
    Commented Jun 14, 2017 at 20:45
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    I would note that wealth building requires investible income - meaning income after all bills and debts have been paid. Wealth building is not about making more money - it's about investing the money that you already make.
    – D Stanley
    Commented Jun 14, 2017 at 20:48
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    @DStanley, I agree completely, that's why I think rich and wealth are different concepts. You can be rich with no wealth (you're a spender); and you can be wealthy with no earned income (heirs etc).
    – quid
    Commented Jun 14, 2017 at 20:49
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    It sounds more impressive than "The first step to being successful in investing is to end up with more money than you started with". It might also convince you that "investing is complicated and I don't understand it, therefore I should pay somebody else to do it for me". In other words, it's the usual level of BS that you get in advertising copy.
    – alephzero
    Commented Jun 15, 2017 at 0:41
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    In very simple terms, "building wealth" simply means "saving". (If you think about it, the phrase is pretty literal - it's exactly like saying "growing wealth" or "building savings" or "growing your savings". Pretty straightforward.)
    – Fattie
    Commented Jun 15, 2017 at 8:20

7 Answers 7


Making money is not the same as building wealth. Consider two examples.

Jim is a hard-working person who earns after taxes, $1,000 per week. Jim rents a home. Jim finds a way to spend almost exactly $1,000 on rent, food, insurance, gasoline, etc. every week. At the end of the year, his only assets are his depreciating car, furniture, clothing and $12.57 in his checking account. Jim has made money but Jim is not building wealth.

Mary is a hard-working person who earns after taxes, $1,000 per week. Mary is buying a home. Mary has made the hard decision to live within her means in order to contribute 5% of her after-tax earnings to an IRA. At the end of the year, her assets include her depreciating car, furniture, clothing, $2600 plus investment gains in her IRA, equity in the house and $12.57 in her checking account. Mary has made money and she is building wealth.

Having made a habit pattern, both will probably continue throughout their lifetimes until Jim is forced to leave his job at age 75 with no retirement savings at all. Mary will retire comfortably at age 62 and live in a paid-for home on the investment gains from her IRA, leaving the principal untouched until, in the USA, at least, required minimum distributions give her a raise!

Jim will admire Mary and tell her she is lucky.

  • Comments are not for extended discussion; this conversation has been moved to chat. Commented Jun 16, 2017 at 19:38
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    Equity in a house is not "building wealth" if it's financed: at best it'd be more accurate to refer to it as the worst performing forced savings strategy. Depending on particulars, you might be building more wealth by renting and saving the interest. Commented Jun 17, 2017 at 12:01
  • @AaronHarun that depends on the market. A house purchased for $300000 which has a $250000 mortgage which is in a high growth market may later allow you to downsize to a different $300000 property and pay off the mortgage entirely. And in some cases (like mine) the interest on the mortgage is cheaper than renting in the same area because I bought a house under market value.
    – Stephen
    Commented Jun 19, 2017 at 4:30
  • @AaronHarun and there are other advantages to having a mortgage. With an offset account you can have instant access to a lot of cash which is effectively earning you interest at a rate equal to your mortgage interest rate untaxed. Equity has a lot of value and is a quick way of building wealth. It's not great at generating cash but it should be considered as part of your wealth. In my country and at my tax rate, having a mortgage and offsetting it is effectively earning 6% p.a. when factoring in tax. Not counting capital growth. Not the best investment but reasonable nonetheless.
    – Stephen
    Commented Jun 19, 2017 at 4:33
  • @Stephen, of course, there are times when having a mortgage is better than renting, but in a place that people come to to learn good investing/money advice, it's best not to repeat the myths as if they are truth. Yes, buying property in certain regions at certain times is a good investment, but that's also true of buying 300k worth of Yahoo stock or copper ore. Sometimes, you will win putting all your money in one asset but there is a reason no one advises doing it ... outside of housing. Commented Jun 19, 2017 at 15:34

As far as I know, and from a general perspective, "building wealth" seems identical to the term "making money."

For this you would be incorrect. Exhibit A is MC Hammer he earned a massive amount of money during his musical career, but is now basically broke. On a more pedestrian level most of the middle class live paycheck-to-paycheck with no reserves although they enjoy some of the highest income in the world.

Building wealth is a multifaceted task that transcends earning and investing money. For some building a family is important, others go beyond that and want to build a legacy for future generations. Others focus more on experiences and travel. One of my own is to be able to scuba dive despite the high costs of the hobby.

I would say that a central part of wealth building is to have your investments earn enough to provide support to you and your family sometime during your lifetime. Most people shoot for doing this in their early 60s or so, but many have been able to do so at a much younger age.

Your question implies some understanding of this. First you need income, without it there is no money to live on let alone invest. So your best bet is always to seek to increase your earning ability.

From that you can invest. For most Americans, they spend a lot on eating out, TVs, and cars so very little is left over to invest. However, this is a choice. One can cut some luxuries and be able to invest some money, or they can be extremely frugal and invest a lot.

Eventually your investments start to grow and compounding interest starts adding more to your account than you are regularly contributing, so in a sense: earn to invest, which turns investing to invest.

I would be really cautious about a credit card company providing financial advice. I would say those companies have done a lot to wreck the financial future of many families.


The answers above seem to be unable to escape a moral stance, calling the acquisition of money without wealth foolish, and not explaining how the phrases work. Let's take it as words instead.

"money" is a medium of exchange. "making money" means any activity that increases the quantity of money in your possession. Crucially, "money" in this phrase is taken to mean "fluid funds".

"wealth" is etymologically related to "well" and "well-being" and "commonwealth". It is a term indicating goodness in the way you can live your life. Having a lot of money is wealth, but so is having a home, a car, a business, insurance to provide for your loved ones if you should pass ... In a financial aspect, therefore, "wealth" means property that has the capacity to improve your life. When one distinguishes between "making money" and "building wealth", one is primarily concerned with putting the money one makes into forms other than liquid funds, and practically speaking, into forms that improve the security and enjoyment of one's life.

Now let's get moral.

"Building wealth" could be just earning a few million a year and not spending it (metaphorically hiding it under the mattress -- I'm not talking about interest here). It's not a very efficient way to safeguard against the future, though. It requires you to keep putting out the same effort year after year.

Investing in less liquid items that grow on their own, like stocks, bonds, interest bearing accounts ... these are much more efficient ways to build wealth. By growing on their own, they reduce the effort you have to do to safeguard your future security and enjoyment of life.

Investing in real estate you can live on, or in cars or appliances or other durable property you can make use of -- these methods build wealth by giving you something you can use in the future without spending additional liquid funds.

Investing in real estate for rental or later sale; starting a business or financially backing someone else's business as a partner or shareholder; trading in commodities like metals or food -- similar to the first group, these are methods that will generate fluid money in the future. You are putting in effort now for a benefit later.

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    Nice. You can easily extend this sort of thinking to also include things like your health, your education and skills and the experiences you've had as being amongst the things which are part of your personal wealth.
    – timday
    Commented Jun 16, 2017 at 22:46

Income (aka "making money") refers only to money that comes in. Wealth refers to the total amount of money (and other assets) that you have.

Your wealth will likely depend a lot on your income, but it also depends on many other factors, most notably your spending. If you make a lot of money but spend it all on goods and services that you consume, you won't increase your wealth. Also, you can sometimes increase your wealth in ways that don't really count as "making money" in many contexts; for instance, if you own a piece of property, and it increases in value, your wealth has increased, but you won't actually "make money" until (or unless) you sell the property.

"Building wealth" means adopting a comprehensive set of policies aimed at increasing your wealth. Making more money can be one aspect of this. But building wealth will likely also involve decisions about saving, spending, and investing, among other things.


building wealth means making money and saving it.

your savings rate is a much better predictor of your wealth than your income. e.g. if you told me your savings rate was 50% over the last 20 years, then i could confidently predict that you are wealthy. on the other hand, if you told me your income was 250k$ per year over the last 20 years, i could not predict whether or not you were wealthy.

side notes/definitions:

  1. i'm assuming usd in the usa for these numbers.
  2. let's call a net worth of 250k$ "wealthy" for the sake of argument. although really, wealth is so tightly correlated with age you can't really say if someone is relatively wealthy unless you know how old they are.

They're really out to sell you lousy investments

The goal here is to get you in contact with a salesman who will talk you into buying financial products that aren't all that great, but they make a lot of money on.

Your credit card company collects a kickback if you sign up with that sales firm. They make it sound like this a perk, a privilege of being a customer. Actually they are monetizing you.

This is generally the case anytime someone else contacts you about investments. If they are spending the energy/money to reach out to you, they aim to get paid.

Now ... If this inspires you to get serious about investing yourself, that's wonderful! But learn it yourself - it's a lot simpler than it sounds, and you can save/make a ton of money by not overpaying for unbecessarily complex financial "products". Places to start:

  • Dave Ramsey or Suze Orman for general "get your house in order and ready to play" financial advice
  • John Bogle's book on mutual funds on how to invest efficiently

Lizzy puts $10,000 onto VOO, a very efficient index fund ETF based on the S&P 500. Doofus has a salesman recommend a variable annuity and managed fund and invests $10,000. Three years later the S&P 500 has gone up 44%. Lizzy has $14,360, only losing $40 to fees, because of that hyperefficient ETF. Doofus has $12,000. Doofus isn't complaining, he did alright by his reckoning. But Doofus has no idea how much went to fees and commissions, because that's all concealed under the false complexity of the products.

Now you know why they want to talk to you!

Knowledge is power, or in this case, $2360. The smartest guy in the room wins, make it you.

Making money vs Building wealth

Making money is where it starts, it's where it goes that makes the difference!

  • money blown, nothing left to show for it (cable, concerts, travel)
  • things which passively increase in value (stocks, bonds)
  • things which decay, but passively make more money than they lose (rental real estate)
  • tools-of-trade you actively use to make money (A vehicle you use to drive Uber)

The middle two are building wealth. You make $1000/month renting the house, it costs you $200/month in upkeep, you are netting $800, that pays the mortgage and you collect some tax benefits too.

The last one is hit or miss. You have to actively do the work. And the question is, what other work are you passing up to do this? Would you be better off being someone else's employee, and let them carry the overhead and the business risk? Ideally, yours can grow into a midsize business where you can step back from daily operations and let others do the work. And then you have built wealth. But on the other hand, so many businesses fail! The nice thing about the middle two is they are reliable (over the long term) and automatic.

  • Thank you for the very excellent first half of this that nobody else addressed! Very important set of points! Commented Jun 17, 2017 at 22:01

I think that the current answer set would be improved with another comparison.

Part One: Building Wealth vs. Making Money

To simplify things, let's compare all this to physical fitness: 'losing weight' and 'exercising'.

First of all, it should be 'building wealth, making money, and spending less' vs 'losing weight, exercising, and eating less'. Ignoring that third part is a guaranteed way to never understand things.

That being said, let's walk through some parallel phrases for describing the relationships between these different concepts.

  • Building wealth is the difference between how much money you make and how much you spend. Losing weight is the difference between how many calories you burn and how many you consume.
  • It's possible to build wealth while making only a little money. It's possible to lose weight with little exercise.
  • It's possible for wealth to stagnate or shrink while making tons of money. It's possible to get fatter while exercising frequently.
  • You will build wealth fastest by making more money and simultaneously spending less. You will lose weight fastest by exercising more and simultaneously eating less.
  • There are different ways to build wealth and some are better than others. There are different ways to exercise and diet and some are better than others.
  • Anybody advertising an investment opportunity probably doesn't really care about whether or not you gain wealth faster. Anybody advertising a new diet plan probably doesn't really care about whether or not you lose weight faster.

Tl;dr Part One

  • Making Money = Building Wealth - Spending Money

Part Two: What does 'building wealth' mean here?

The first step to being successful with investing is with building wealth.

The first step to successfully hatching eggs is owning chickens. The first step to being a smart home owner is owning a home. The first step to being a great parent is getting pregnant.

In the specific context you gave, 'building wealth' as an investing term is just a buzz word that was used in a painfully obnoxious way by advertisers who want your money. If somebody IRL offered you this statement as genuine advice, it would seem mildly condescending.

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