Understanding Income and Wealth: Explained in Simple Terms

💰Income is money received from selling capital, including land or labor, while wealth refers to the total value of assets.

📈Income inequality is the unequal distribution of income among members of an economy, with top earners receiving a larger share from returns on investments.

💵Wealth inequality is the unequal distribution of wealth among members of an economy, with the richest individuals possessing a larger percentage of the total wealth.

💸Income is typically measured through percentages of income related to a percentage of the population, while wealth is measured through percentages of wealth and possession.

🌍Income and wealth inequality exist in various economies, with income inequality often more accurately measured due to the data collected by taxation agencies.

What is income?

—Income refers to money or money equivalent received through the selling of capital, including land or labor. It can include money generated by salary, hourly wage, interest, dividends, rent, or profits from selling assets.

What is wealth?

—Wealth refers to the total value of assets held by an individual or household. It includes savings, financial assets like stocks and bonds, property ownership, and ownership of pension and life insurance plans.

What is income inequality?

—Income inequality is the unequal distribution of income among members of an economy. It is often represented in the form of percentages, with top earners receiving a larger share of income from returns on investments.

What is wealth inequality?

—Wealth inequality is the unequal distribution of wealth among members of an economy. It is typically measured through percentages of wealth and possession, with the richest individuals owning a larger percentage of the total wealth.

How is income measured?

—Income is measured through percentages of income related to a percentage of the population. Data on income is often collected by taxation agencies, making it more accurate and easier to measure compared to wealth.

00:05Income is money or money equivalent received through the selling of capital, including land or labor.

00:38Income earners receive most of their income from their labor, while top earners receive a larger share from returns on investments.

01:00Wealth refers to the total value of assets held by an individual or household, including savings, property ownership, and financial assets.

01:45Income inequality is the unequal distribution of income among members of an economy, often represented in percentages.

02:00Wealth inequality is the unequal distribution of wealth among members of an economy, typically measured through percentages of wealth and possession.