How do 'wealth' and 'income' differ?

Wealth and income represent two distinct but related concepts in understanding economic status. Wealth is defined as the total value of assets owned by an individual or entity, encompassing various forms such as real estate, stocks, bonds, and other investments. This total value reflects accumulated resources and financial security over time. On the other hand, income refers to the flow of money received, typically on a regular basis, such as wages from employment, rental income, or dividends from investments.

The distinction is important because wealth can provide a cushion in financial emergencies and can generate additional income through investments, while income represents the immediate resources available for daily expenses. Understanding this difference helps clarify discussions about social class, economic disparity, and financial planning.