The Definition of Income and Wealth
January 26, 2011 8 Comments
Wealth consists of those items of economic value that an individual owns, while income is an inflow of items of economic value.
wealth = assets − liabilities
Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset.
A liability is an obligation arising from past transactions , the settlement of which may result in expenses or transfer of assets.
The relation between wealth, income, and expenses is:
change of wealth = income − expense
About Keerthika Singaravel
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Hey why not take a look at this post https://wealthymatters.com/2011/02/14/learn-wealth-building-from-the-millionaire-next-door/ The authors of this book make a clear distinction between income and wealth , assets and liabilities and expenses .The book can also be mined for lots of nifty ways to build one’s wealth.