Difference Between Income and Wealth

August 7, 2018

 

Who doesn’t want to be wealthy? It is hard to find a person who doesn’t care about getting rich especially in today’s very troubled and hard times. This is the reason why there are lotteries and other games that offer ways to get rich quick.

 

Save for a few who are lucky to be born to wealthy parents, most people have to work hard to earn a living and survive. They have to work even harder and save part of their income in order to become rich and have all the wealth that they want.


Wealth is defined as having plenty of material goods and money. It comes from the Old English word “wela” which is from the Indo European word “wel” which means “to want or desire.” Wealth is something that most if not all people desire.

 

In economics, wealth is the net worth of an individual, that is, the value of all his assets minus all his liabilities. It includes all his assets such as money, real estate, and personal property. It is the product of one’s labor which satisfies all his needs and wants.


While wealth represents what a person owns, income is what he earns, and it consists of the inflow of cash. In the long run, income creates wealth if it is properly managed. A person may have a huge income, but if he doesn’t save, he will not be able to accumulate wealth.


Income is usually expressed in monetary terms such as the total amount he receives as a salary, wage, profit, interests, rents, and other earnings for a certain period. It is what a person earns and spends for consumption and also what he saves.

 

Having a huge income does not ensure a person to become wealthy. High income earners usually have high standards of living which make them spend more while there are many who earn less income but may save more and acquire wealth. It all depends on how a person manages his income.


Income is earned immediately, but wealth can take a few years to acquire. Wealth can be acquired by spending income on things or assets that can generate additional income. In time, income from his assets will be more than enough for his needs.

 

Summary:

1.Wealth is the net worth of a person, the total value of his assets minus his liabilities while income is the amount of money that a person received in return for his services, sale of goods, or profit from investments.
2.Wealth takes a huge amount of time to acquire while income is earned immediately.
3.Income generates wealth while having wealth can enable a person to enjoy the fruit of his labor.
4.Wealth includes cash, real estate, personal properties such as jewelry and cars while income is usually represented by a certain amount of money.
5.People can become wealthy if they work hard and save part of their income. In time they don’t need to work in order to generate income because their wealth is more than enough for them.



Read more: Difference Between Wealth and Income | Difference Between http://www.differencebetween.net/language/words-language/difference-between-wealth-and-income/#ixzz5NT4BhGY7

 

Knowing the Difference Between Leading and Managing

George Bradt - Forbes 2015

 

Sometimes we get confused about what we are supposed to be doing leaders and somehow believe that we are to micromanage, control every element, take all of the responsibility all because we have a title or sit in the corner office.  This week I thought that I would share a few thoughts from George Bradt that he shared a couple of years back in Forbes Magazine. His example from Coca-Cola is highly illustrative on how to approach things more from a leadership position.

 

Leaders influence. Managers direct. While it may not be that black and white, leaders generally do focus on what matters and why as managers focus on how. Both use different forms of influence and direction at different times. But leaders have a bias to influencing by inspiring and enabling through advice and counsel while managers have a bias to command and control.

 

Coca-Cola’s Doug Ivester was crystal clear on the difference. Sometimes he’d come to us and say,

 

"This is your decision to make. I’d like to give you my thoughts as input."

 

Since he was the CEO, we always considered his thoughts. Most of the time we did things the way he suggested. Sometimes we disagreed. We quickly learned that going back to the CEO and telling him that we decided he didn’t know what he was talking about did not make for pleasant meetings. But it did work when we went back to him and said,

 

"Wanted to follow up on the decision we made on this subject. After we talked to you, we did some more digging and uncovered five things that you could not have known about. Given those new findings, we decided to go a different direction than what you had suggested."

 

 

He was fine with that.

 

Other times he’d say,

 

"See these stripes. I am the CEO of this company. I’m going to give you some direction which you will follow.

It was extraordinarily helpful to know when he was giving us input for us to consider in our decision and when he was giving us no choice but to follow his direction."

 

 

 

Ethical Failures: Boards Need to Be Paying Attention

As a Board President and someone that enjoys teaching ethics at the university level, I have to tell you that it seems like I have more and more examples of stupid leaders everyday to use in class.  This week, I want to call attention to an article written by David Greenberg that brings light to a topic that is near and dear to my heart.  The actions or inaction of company boards.  He points out that new research indicates that half of all of the large companies out there spend fewer than two house on E & C every year exposing themselves to reputational risk and loss of value.  Don't believe me? How about this week's example - Harvey Weinstein.  Seriously, no one saw this coming? 

 

Company Ethics and Compliance Officers are asleep at the switch:

 

• Only 40% of CECOs say that their boards of directors are willing to hold senior executives accountable for misconduct.
• Nearly half say that their board has not received education and training on their E&C responsibilities.
• Over 50% say their boards spend two hours or fewer working on E&C each year.
• About 40% say their boards have not done a “deep dive” on compliance failures and scandals, despite recent US Department of Justice regulations requiring them to do so.

 

Boards tend to devote too little time, priority and depth to the deeper, more fundamental questions of E&C, with a bias toward a “check-the-box” approach: How many people have been trained? How many calls have been made to the compliance hotline? How many acts of misconduct have been recorded this year? Do we have the right rules in place?

 

It's not just the private sector here. I've seen this first hand in many non-profits and hospital boards as well. 

 

Ultimately, we as leaders need to get this under control. Check out the rest of Greenberg's article  to see ideas and tips on how to move forward. 

 

 

 

About the Editor and Contributor:

Scott Hollis is a Senior Certified Professional in HR and a Certified Senior Professional in Human Resources.  He has advanced degrees in Organizational Leadership and Organizational Development. He is faculty with several universities, a business owner, leader, veteran and dad. 

 

 

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