The Difference And Relation Among Wealth, Income, And Assets

Income can be described in a variety of different ways, but Helms talks about it as a stream of money in which a person receives from sources on a continuous basis (Helms, 2017). In slight opposition to this Helms says that wealth is the total market value of all the assets one possesses, stores, or saves for future use. Assets can be broken down into three categories: real, financial, and tangible. These three types will be further discussed when comparing wealth to income. A general example of wealth and income is that if the water coming out of a faucet and into the bathtub was your income then the water accumulating in the plugged tub would be the wealth. This shows a slight difference in how income is a flowing source whereas wealth is a stable source but will be further discussed in this paper. When talking about crime and class in comparison to wealth there is a high correlation between getting away with murder and having a higher wealth (one is able to “get away with murder” because they can pay it off). Class is then also explained by using income, wealth, and status; in other words, how society is grouped is related to income and wealth.

Income helps in the creation of wealth but is a fixed return for goods or services (Staff, 2017). Income is used when describing the financial standing within a family dynamic or the class group in which an individual or group belong too. When looking at health and income, greater income tends to lower the likelihood of disease or premature death (Barak et. al. , 2015). In my opinion this could be because if you do not have enough of an income (periodic cash inflow) then you will not be able to afford everyday health problems which can include getting medication to stop disease. There is also a correlation between infant mortality and income (higher income means lower rate), mental health (higher income better mental health), and physical pain (lower income is more physical pain). This too could be due to not having the income to afford the costs that come along with health and being able to afford health care if an emergency happens. Finally, income is the most straight forward indicator of class as it indicates the individual’s source of revenue. If an individual is of higher class, then they will have a greater source of revenue and thus as mentioned before will be more likely to afford things such as medical costs.

Wealth is, in Helms definition, what one accumulated over the course of their life (Helms, 2017), and is further described by Staff, as the sum of all assets that one has. Slightly different to this, Barak and group defines wealth as the possessions that one has excluding their debts. It is currently believed by society that if one tries hard enough and puts enough effort into their work and lives, they can one day become wealthy and rich; meaning that everyone has a fair shot at being the wealthiest man/women in the country. If we start having an open talking about wealth distribution, then these beliefs may be altering; no matter how one makes for income they may never end up as the wealthiest person in the world (Barak et. al. , 2015). I will further touch on this in the differences between wealth, income, and assets. Class is broken into upper, middle, and lower groups and wealth is essentially the source as to how societal class is divided into these said groupings. Overall wealth provides security for the setbacks that arise in a person's life and will end up being what is relied upon after income stops flowing.

Financial assets are one of the three categories of assets; real assets (meaning they are physical assets that draw their value from a substance of property), financial assets (the value comes from a contractual claim), and intangible assets (value is not physical in nature, for example a trademark). In other words, a financial asset can be real or tangible. Chen also states that the value of a financial asset reflects the market in which the asset came from (Chen, 2019). Assets can also be used to describe the measure of ownership in the economic system. This means that if one individual has more assets then another individual, they will be higher within the economic system (in referring back to the previous paragraph they will be of higher class).

When looking at the difference between the wording of income and wealth it would be noted that income is a steady flow of financial assets for a limited period whereas wealth is a lifetime accumulation of capital (assets). In looking at health there is a difference between the correlation between being wealthy or having higher income and health. It was found that people with higher income will actually be healthier than wealthy people. As stated earlier it may not actually be possible for everyone to be wealthy. This is because wealth is inherited in the form of stock, property, or money. Everyone can have a high income (a good job) if they choose but due to not everyone having inheritance then not everyone can be wealthy. There is a difference in the motive for crimes between; crimes based on income (poverty) are motivated by need for goods and services whereas crimes based on wealth are motivated by greed. This means that if a person of low income commits a crime is it usually due to them needing a basic human need but if a wealthy person (someone who can afford all basic needs) commits a crime then it is out of greed.

There are also similarities between income, wealth, and assets in that income is the source of wealth so wealth yields income. Wealth and income both include the need for or the accumulation of assets. Income and wealth both tend to increase or decrease but they do not do so at the same rate. In other words, if income increases it usually progressively gets higher but wealth increases at a rapid rate. Sometimes greater income is related to greater wealth, but this is not always the case. Being rich (having high income or wealth) has been shown to have its advantages (it even joked that people with capital do not get the capital punishment). It is also stated by Barak and group that assets, wealth, and income all show your level of class within the society.

In conclusion, income is an asset that a person gets in return for work and wealth is what people use to survive on when not working (saved assets). Though, in order to have income you need financial assets and in order to have wealth you must have real or intangible assets. Just because a person earns high income does not mean they will end up wealthy. For example, a pro-athlete can earn a very high income (be given a large amount of assets on a periodic basis) and live very well off but their expenses may be greater so they will still be living pay cheque to pay cheque. This means that the assets are not being saved so the player will never become wealthy. Income and wealth are both commonly used to assess the wellbeing of individuals or groups but the relationship is not always perfect but people with higher income will have better health because they will be able to afford daily healthcare costs as well as preventatives. Lastly, though income and wealth are not the official knowledge about crime they play an important role in justice. Barak and group conclude perfectly in saying that no matter what society tries to do the mega rich (wealthy) will still get richer (wealthier).

References

1. Augustin, B. and Sanga, D. (2002, November). Income and Wealth. Retrieved from https://www150. statcan. gc. ca/n1/pub/75-001-x/01102/6359-eng. html
2. Barak, G. , Leighton, P. , & Cotton, A. (2015). Understanding race and White privilege. In Class, race, gender, & crime (4thEd. ) (pp. 105-126). Rowman & Littlefield: Lanham.
3. Chen, J. (2019, May 09). The Money You Can't See: Financial Assets. Retrieved from https://www. investopedia. com/terms/f/financialasset. asp
4. Helms, D. (2017, December 30). Difference Between Income and Wealth (with Comparison Chart). Retrieved from https://keydifferences. com/difference-between-income-and-wealth. html
5. Staff, E. (2017, December 05). Difference between Wealth and Income. Retrieved from https://difference. guru/difference-between-wealth-and-income/
6. Woolf, S. H. , Aron, L. , Dubai, L. , Simon, S. M. , Zimmerman, E. , & Luk, K. X. (2015, April). How Are Income And weAltH lInked to HeAltH And longevIty? Retrieved from https://www. urban. org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity. pdf