Wealth

Different ways of expressing wealth exist. All the tangible assets in one's possession are what is meant by "wealth" in a purely material sense. In terms of money, net worth is the most common measure of wealth.

In various societies over time, wealth has been defined and measured differently. Money is the most widely used metric for measuring wealth in contemporary society. Money serves as a unit of account in the measurement of wealth, for instance. However, it offers a convenient common denominator for comparison. The extent to which outside forces can manipulate the value of money can have a dramatic impact on measuring wealth in this way. 

Otherwise, it is possible to gauge and assess wealth using land and even livestock. For instance, the ancient Egyptians used wheat as a unit of measurement for wealth. Sheep, horses, and cattle have frequently been used as indicators of wealth in herding cultures. 

What Is Wealth?

The value of all the valuable assets that a person, group of people, business, or nation owns is measured as wealth. The total market value of all owned tangible and intangible assets is calculated, and all debts are then subtracted. Wealth is essentially the accumulation of limited resources.

When certain individuals, groups, or nations are able to amass a large quantity of expensive goods or resources, they are said to be wealthy. Income and wealth can be compared because income is a flow while wealth is a stock that can be viewed either in absolute or relative terms. 

Measurement of wealth

The difficulty of assessing wealth in terms of various goods is solved by measuring wealth in terms of money. The values can then be combined for addition or subtraction. This then makes it possible to use net worth as a convenient indicator of wealth. Net worth equals liabilities less assets. Net worth is another name for shareholders' equity or book value in the context of businesses. According to common sense, net worth defines wealth as all of the actual assets that are under one's control, excluding those that are ultimately someone else's property. 

Unlike a flow variable like income, wealth is a stock variable. At a specific point in time, income measures the amount of money (or goods) that is earned over a specified period of time, whereas wealth measures the amount of valuable economic goods that have been accumulated at a specific point in time. Income is the accumulation of wealth over time (or subtraction, if it is negative).

A person who has a positive net income over time will eventually become very wealthy. Although it is frequently incorrectly referred to as a measure of wealth, Gross Domestic Product (GDP) for nations can be thought of as a measure of income (a flow variable) (a stock variable). 

"Wealthy" can be defined as having a significant amount of net worth, but most people understand this concept in a more relative sense. Total wealth can differ between people and groups depending on how it is measured, whether in terms of money and net worth or in commodities like wheat or sheep. We typically use the relative differences in wealth between individuals to categorise whether a person is wealthy or not.

Research has repeatedly demonstrated that people's perceptions of their own happiness and wellbeing are significantly more influenced by their estimates of wealth relative to others than by their own absolute wealth. This is also a contributing factor to the fact that the concept of wealth is typically only applied to scarce economic goods; goods that are abundant and no basis for relative comparisons across individuals is provided by free for all. 

Most of the richest people in the world, including 735 billionaires, reside in the United States.

Walmart, a retailer with headquarters in Arkansas, is one of the richest US companies, with annual sales that surpass the GDP of many nations. It generated $559 billion in revenue in 2021 and had operations in 24 different nations. Walmart, which is ranked first on the Forbes Fortune 500 list, employs more than 10,500 people worldwide and provides weekly services to more than 220 million customers.

$237.9 bln

Elon Musk, CEO of Tesla and SpaceX, has the highest net worth in the world as of July 2022. 

Amazon, a wealthy e-commerce behemoth, came in second on Fortune's list with revenues of $386 billion for 2021, which is equally impressive. Despite a change in leadership and a labor shortage, the business thrived in 2021, posting profits that were over 54% higher than in 2020. As of March 31, 2022, its market capitalization of $1.66 trillion made it one of the richest companies in the world.