Difference Between Similar Terms and Objects

Difference Between Wealth and Income

Wealth vs Income

Who doesn’t want to be wealthy? It is hard to find a person who doesn’t care about getting rich especially in today’s very troubled and hard times. This is the reason why there are lotteries and other games that offer ways to get rich quick.

Save for a few who are lucky to be born to wealthy parents, most people have to work hard to earn a living and survive. They have to work even harder and save part of their income in order to become rich and have all the wealth that they want.
Wealth is defined as having plenty of material goods and money. It comes from the Old English word “wela” which is from the Indo European word “wel” which means “to want or desire.” Wealth is something that most if not all people desire.

In economics, wealth is the net worth of an individual, that is, the value of all his assets minus all his liabilities. It includes all his assets such as money, real estate, and personal property. It is the product of one’s labor which satisfies all his needs and wants.
While wealth represents what a person owns, income is what he earns, and it consists of the inflow of cash. In the long run, income creates wealth if it is properly managed. A person may have a huge income, but if he doesn’t save, he will not be able to accumulate wealth.
Income is usually expressed in monetary terms such as the total amount he receives as a salary, wage, profit, interests, rents, and other earnings for a certain period. It is what a person earns and spends for consumption and also what he saves.

Having a huge income does not ensure a person to become wealthy. High income earners usually have high standards of living which make them spend more while there are many who earn less income but may save more and acquire wealth. It all depends on how a person manages his income.
Income is earned immediately, but wealth can take a few years to acquire. Wealth can be acquired by spending income on things or assets that can generate additional income. In time, income from his assets will be more than enough for his needs.

Summary:

1.Wealth is the net worth of a person, the total value of his assets minus his liabilities while income is the amount of money that a person received in return for his services, sale of goods, or profit from investments.
2.Wealth takes a huge amount of time to acquire while income is earned immediately.
3.Income generates wealth while having wealth can enable a person to enjoy the fruit of his labor.
4.Wealth includes cash, real estate, personal properties such as jewelry and cars while income is usually represented by a certain amount of money.
5.People can become wealthy if they work hard and save part of their income. In time they don’t need to work in order to generate income because their wealth is more than enough for them.


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