Wealth

Several terms redirect here. For other uses, see Wealth (disambiguation), Wealthy (disambiguation), Affluence (disambiguation) and Affluent (disambiguation).

Wealth is the abundance of valuable financial assets or physical possessions which can be used for transactions. This idea comes from the old Old English word weal, which has roots in an Indo-European word stem. Wealth is important in all areas of economics, especially in growth economics and development economics, but what counts as wealth can change depending on the situation. Someone with a lot of wealth is called wealthy. Net worth is the value of what a person owns minus what they owe, not counting money set aside in trust accounts.

Economists often describe wealth as "anything of value," which shows that wealth can mean different things to different people and isn't always the same. Thinking about wealth can involve important ethical choices, because many people believe that getting as much wealth as possible is a good goal. A community, area, or country that has many valuable things to help everyone is also called wealthy.

The United Nations uses the idea of inclusive wealth. This includes natural things like land, forests, energy resources, and minerals; human skills such as education; and made things like machines, buildings, and roads.

History

Long ago, around 35,000 years ago, early humans started living in more settled groups. They began trading items like tools and food, and those who had many valuable things were seen as wealthy.

Later, thinkers like Adam Smith described wealth as what a land and its people produce each year. Today, wealth often means having lots of valuable things like money, real estate, or personal items. People with more wealth than others are usually called rich or affluent.

Wealth can include things like homes, savings, and investments. It helps people feel secure and can be used for big goals like buying a house or paying for school. Wealth also plays a role in how people are viewed in society. Having wealth can offer protection and opportunities during tough times.

Global amount

Main article: Global debt

The wealth of households around the world adds up to US$280 trillion. This number grew quickly in 2017, rising by 6.4%—the fastest increase since 2012—to reach US$280 trillion. This growth was seen in both investments and physical assets, which went above levels from before a big financial crisis in 2007.

By 2020, the total wealth worldwide had grown to US$514 trillion, according to a report. China had the most wealth at US$120 trillion, but another report said the U.S. had even more, at US$126.3 trillion.

Philosophical analysis

In Western civilization, the idea of wealth is tied to measuring things, a way of thinking that began in ancient Greece. This included measuring nature, planning for war, and using numbers in economics. The creation of coins and banks was very important because it allowed people to measure wealth in things like gold and money.

Even today, some thinkers like Nietzsche questioned this focus on measurable wealth. He believed that the true meaning of wealth is often lost when we only think about numbers.

Economic analysis

Main article: Saving

In economics, wealth is the total value of everything a person, family, or country owns, minus what they owe. This can include things like houses, cars, money, and other valuable items. When we talk about a country's wealth, we look at what it owns compared to what it owes to other countries.

Economists talk about wealth differently from income. Wealth is what you have at one point in time, like the value of a farm on a specific day. Income is what you earn over time, like the money made from selling crops each year. When people's wealth increases, they might spend more money, which can affect the whole economy. Different thinkers like John Stuart Mill, Adam Smith, and Karl Marx have studied how wealth is created and measured. Wealth can be measured in current money value or adjusted for price changes. It usually includes physical things like land and financial items like money and bonds, but not things like skills or friendships. Environmental assets, like clean air or forests, are often not included because they are hard to value.

Versus social class

Social class and wealth are related but not the same. Wealth is about the value of what a person or family owns, like their home and money.

In some theories, classes are split into upper and lower groups. The upper class often tries to keep and pass on their wealth to their children. The middle class sees wealth as a safety net for tough times. Below them, the working class and poor have less wealth.

Distribution

Main articles: Distribution of wealth and List of countries by wealth per adult

In the United States, wealth is not shared equally. Some families have little or no wealth, while others have a lot. Generally, people with more education tend to have more wealth. Married couples usually have more wealth than single people.

Across the world, most wealth is found in places like North America, Europe, and parts of Asia. A small group of people hold a large share of all the world's wealth. This means that wealth is often unevenly shared, with some having much more than others. Some people even owe more money than they own.