It sounds like a set-up for a punchline, but there are key identifiable differences.

According to Irish Independent personal finance columnist Sinead Ryan, it all comes down to “stuff” – how we spend our money, and, crucially, what we spend our money on.

“For me, somebody who is affluent likes the trappings of what money can buy,” says Ryan on the latest episode of the Money Talks podcast.

“They like the stuff. They want other people to know that they can afford the stuff. They have new things, the latest things, and a constant through-flow of conspicuous consumption.

“People who value wealth over that are people who are quietly putting money aside for their future. They have little or no debt. They don’t need the stuff to show off to other people what they do own or do have. It’s a more modest interaction with money, but they’re using money for a more powerful purpose, as they would see it.”

Ryan is quick to note that there’s “nothing wrong” with buying material possessions – it makes perfect sense for human beings to want to enjoy the payoff that comes with the fruits of their labour once basic needs are tended to.

Still, what you do – or don’t do – with your disposable income can say a lot about you.

Ryan goes on to present the example of Ingvar Kamprad, late Swedish billionaire and founder of multinational juggernaut Ikea.

“When he died a few years ago, Ingvar Kamprad was worth $58 billion,” Ryan says.

“He drove a 10-year-old Volvo and lived in the house he’d always lived in. All of his furniture was from Ikea. He was an extraordinarily wealthy man, but not one who valued affluence.”

There are also key differences between how wealthy and affluent people save and invest their money, Ryan explains.

“There used to be a saying when I worked in the insurance industry – the difference between an old man and a retired gentleman is a good pension.”

For the full ‘wealth versus affluence’ breakdown, including how property and pensions play into the mix, check out the latest episode of Money Talks wherever you get your podcasts.

The content of this podcast is for information purposes and does not constitute investment advice or recommendation of any investment product.