how to measure wealth
measuring wealth in terms of money overcomes the problem of evaluating wealth in the form of different kinds of goods these values can then be added or subtracted together this in turn permits the convenient use of net worth as a measure of wealth net worth is equal to assets minus liabilities for businesses net worth is also known as shareholders equity or book value in commonsense terms net worth expresses wealth as all the real resources under one s control excluding those that ultimately belong to someone else wealth is a stock variable as opposed to a flow variable like income wealth measures the amount of valuable economic goods accumulated at a given point in time income measures the amount of money or goods obtained over a given interval of time income represents the addition to wealth over time or subtraction if it is negative a person whose net income is positive over time will become increasingly wealthy over time for countries gross domestic product gdp can be thought of as a measure of income a flow variable though it is often erroneously referred to as a measure of wealth a stock variable anyone who has accumulated a large quantity of net worth can be considered wealthy but most people think of this term in more of a relative sense whether measured in terms of money and net worth or in commodities like wheat or sheep total wealth can vary among individuals and groups the relative differences in wealth between people are what we usually refer to in order to define who is wealthy or not research has consistently shown that people s perception of their own well being and happiness depends much more on their estimates of wealth relative to other people than on absolute wealth this is also part of why the concept of wealth is usually applied only to scarce economic goods goods that are abundant and free for everyone provide no basis for relative comparisons across individuals the united states is home to most of the world s wealthiest people including 735 billionaires 1arkansas based retailer walmart is one of the wealthiest corporations in the u s with annual revenue exceeding the gdp of many countries for 2021 it recorded 559 billion in revenue with a presence in 24 countries worldwide 2 ranked number one on the fortune 500 list in 2022 walmart operates more than 10 500 stores globally and serves more than 220 million customers weekly 32the net worth of the world s wealthiest person tesla spacex ceo elon musk as of sept 2 2022 4equally as impressive wealthy ecommerce giant amazon boasted revenue of 386 billion for 2021 earning it the number two position on fortune s list despite experiencing a leadership change and a shortage of workers the company continued to flourish in 2021 posting profits more than 54 higher vs 2020 its market capitalization 1 66 trillion as of march 31 2022 has also positioned it as one of the wealthiest companies in the world 5