Wealth
The total value of assets owned minus liabilities owed by an individual or household.
What is Wealth?
Wealth is the accumulated stock of valuable assets owned by an individual, household, or entity, net of all liabilities. It represents financial security and the capacity to generate future income without relying solely on employment. Wealth is built over time through a combination of income generation, disciplined saving, and investment returns. The Federal Reserve's Survey of Consumer Finances measures household wealth distribution in the U.S. and consistently shows wide inequality — the top 10% of households hold over 65% of total wealth. Building wealth requires not just earning income but consistently converting earnings into lasting assets.
Example
A household with $800,000 in home equity, $400,000 in retirement accounts, $50,000 in stocks, and $30,000 in a savings account — offset by a $20,000 car loan — has a net worth (wealth) of approximately $1.26 million. This wealth provides financial security, investment income potential, and a legacy for future generations.