An old high school chum recently e-mailed me about the meaning of wealth. Without consulting anything, I whipped up the following answer. Now I wonder how I did? If anyone thinks I made any blunders let me know!

The simplest definition of wealth is that it is any lasting asset that is valued by people. Strictly speaking it might include intangible things (a sense of humor), but most often we think of wealth in terms of tangible assets like cars, houses, stocks, bonds, fine art, etc.

Finally, there is an important distinction between wealth and income that often confuses students. Income is the flow of value that comes from wealth. In practical terms, the corn that we grow from the land is "income" while the land itself is the "wealth". It gets complicated because we can convert income into wealth to create still more wealth. We can for example use some of the corn we grow to purchase a new house for the farm. And to complete the circle, the value of a piece of wealth is often determined by its ability to generate income.