WEALTH

Wealth

Wealth is defined as a stock of assets that creates a flow of income and it can be held in a variety of forms by individuals, firms and also the nation as a whole:

• Financial wealth - stocks and shares, bonds, savings in bank and building society accounts and contributions to pension schemes.
• Marketable wealth - consumer durables that can be sold for a price e.g. rare antiques.
• Social capital – including social infrastructure such as transport systems, schools and hospitals.

It is important to distinguish between income and wealth. For example, if you receive a higher wage or salary from your job then this adds to your monthly income and if this is saved in a bank, or by making contributions to a pension fund then you are adding to your financial wealth. 

Being wealthy can also generate income for if you own shares in companies listed on the stock market then you expect to receive dividend income once or twice a year. And if you have money in a savings account, you will be paid interest on your savings balances. Likewise, if you own properties, then you can earn some income from renting it out to tenants