Wealth is a person’s net worth. It is expressed this way:
(1) wealth = assets − liabilities
Most people not educated in the language of money often confuse “wealth” with “income”. These two terms describe different but related things. Wealth consists of those items of economic value that an individual owns, while income is an inflow of items of economic value. The relation between wealth, income, and expenses is:
change of wealth = income − expense
The distribution of income is substantially different from the distribution of wealth. According to the International Association for Research in Income and Wealth, “the world distribution of wealth is much more unequal than that of income.”
If an individual has a large income but also large expenses, their wealth could be small or even negative.
In the United States at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% owned 38%. On the other hand, the bottom 40% owned less than 1% of the nation’s wealth.