Monday, May 21, 2007

Money And Income Verses Wealth And Net Worth

Money And Income

Money is nothing more than a medium of exchange or means of making payment. It can also be a method by which we measure the market value of goods and services or the time we spend at work. In the United States, money is denominated in dollars; in Britain, money is denominated in pounds; and in Japan, it is denominated in yen.

Money is how people pay for the things that they want. Americans pay for the things they want with the money they have in their wallets, the dollar balances they have in their bank checking accounts, or with their credit cards. In the United States, income is measured in dollars. For example, you might have an income of $30,000. However, your income is not the same as money or vice versa. At any point in time, you may have a few dollars in your pocket and several hundred dollars in your checking account. Obviously, the money you have at any point in time is not equal to your income. Income is how much you earn from your work and what you have invested.

Wealth and Net Worth

Wealth and Net Worth are often used to mean the same thing. Net worth is the market value of your assets minus your debts. If you own a house, car, and household furniture worth $150,000 but you have outstanding debt in excess of $110,000, then your net worth is $40,000. When we use the term wealth, we mean net worth. The true meaning of wealth is not calculated by your total asset value, it is and will always be calculated by your assets minus your debts, thus being net worth.

How wealth is achieved

Great wealth is possible in America. All that most Americans need to do is exploit the income opportunities that is available to them and then control their expenditures.

Creating Wealth Tips And Income Opportunities.

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