Wealth: What it Is
If you have ever pondered the question of what wealth is, here is a section of the website dedicated to defining it, accumulating it and keeping it as it grows!
So what is wealth?
Wealth is the sum of all assets worth having by a person, group, company or country.
Wealth can be defined as the sum of all tangible and intangible assets, then subtracted from all debts.
Wealth is simply the accumulation of scarce resources. When a group of people, organisations, or nations is able to acquire many valuable resources, goods, they are considered wealthy.
Wealth can be compared to income, in that wealth can be considered a stock and income can be considered a flow. It can be viewed in absolute or relative terms.
Understanding Wealth
There are many ways to express wealth. Wealth is a sum of all real resources that are within one's reach. Net worth, which is the most common form of wealth, can be described as financial.
Over time, the definitions and measurements of wealth have changed across societies. Money is the most commonly used way to measure wealth in modern society.
Money is a unit of account that can be used to measure wealth. This common denominator allows for easy comparisons, regardless of how much outside forces can alter the value money. However, it can have a significant impact on wealth measurement.
Land and livestock are also options to measure and assess wealth. For example, the ancient Egyptians used wheat to measure wealth. Wealth has been measured in herding cultures using sheep, horses, and cattle.
Wealth Measured
It is easier to measure wealth in money than it is in goods. These values can be combined or subtracted.
This allows you to easily use net worth as a measure wealth. Net worth equals assets less liabilities. Net worth can also be called shareholders' equity, book value or net worth for businesses.
Net worth is a common term that describes wealth in simple terms. It refers to all real resources one has control of, excluding those which ultimately belong to another.
Wealth is a stock variable and not a flow variable such as income. Wealth is the sum of all the valuable economic goods that have been accumulated at a particular point in time. Income measures how much money or goods are acquired over a period of time.
Income is the sum of wealth and income over time. If it is negative, it will be subtracted. An individual who has a positive net income over time will become more wealthy.
Gross Domestic Product (GDP), which can be used to measure income in a country, is sometimes mistakenly referred as a measure wealth (a stock variable).
A person who has amassed a substantial amount of net worth is considered wealthy and personally developed. However, most people view this term more in a relative sense.
Total wealth can be measured in money, net worth, or commodities such as wheat and sheep. Individuals and groups may have different levels of total wealth.
We usually refer to the relative wealth differences between people to determine who is wealthy.
Points of interest
Here are some interesting points regarding the accumulation and maintenance of abundance:
- Wealth can be defined as the accumulation of valuable economic resources. It can be measured either in real goods or money value.
- Net worth, which is the most commonly used measure of wealth, is calculated by subtracting all outstanding debts from the total market value all assets.
- Wealth is often applied to rare economic goods. Goods that are plentiful and available for all provide no basis for relative comparisons between individuals.
- Wealth is not a variable that flows, but income. It measures the value of economic goods that are accumulated at a particular time.
- We usually refer to the relative wealth differences between people to determine who is wealthy.
Summing Up
It is becoming increasingly common for people to try to invoke the Law of Attraction to help them to manifest abundance in both monetary as well as life contentment terms.
Research consistently shows that people's perceptions of their happiness and wellbeing are influenced more by their wealth estimates relative to others than their absolute dollar value.
This is also why wealth is often applied to very few economic goods. Goods that are plentiful and free for all do not provide a basis for relative comparisons between individuals.
Further Reading
Please check the list of article titles related to this subject below: