Wealth

Wealth is a condition in which a person, household, company, or country possesses assets of value exceeding basic needs. These assets may include money, debts owed by others, houses and land, livestock, industrial equipment, and company shares. Wealth differs from income: income is the flow of money over a given period, while wealth is the stock accumulated over time.

The concept of wealth is tied to society and time period. In pastoral societies, the number of camels and goats is the measure. In agricultural societies, fertile land matters most. In modern market economies, the most common measure is the monetary value of net assets, calculated as total assets minus debts.

Types of assets

Economists divide assets into categories. Physical assets are tangible things such as houses, land, vehicles, and equipment. Financial assets are money in banks, shares, and bonds. Intangible assets include intellectual property rights and business names. Terms also used include "human capital" (the knowledge and skills of workers) and "social capital" (the relationships and trust among people).

How wealth grows

Wealth typically comes from three sources: saving part of income, returns on investment (interest, dividends, and increases in asset value), and inheritance. When investment returns exceed overall economic growth, accumulated wealth grows faster than wealth based on wages, which increases wealth inequality.

Distribution of wealth

Global measures show that wealth inequality is greater than income inequality: a small portion of people hold a large share of wealth, while many hold little net assets or are in debt when liabilities are counted. Governments attempt to address this through wealth taxes, inheritance taxes, and social programs. Political debate centres on whether such taxes reduce investment and economic growth.

Somali society

In Somali custom, livestock—particularly camels—long served as the primary measure of wealth and honour. Cultural practices exist for redistributing assets, such as the qaaran and zakat (almsgiving), through which those in hardship can receive support. In recent decades, urban commerce, houses, and remittances from abroad have significantly changed how households build wealth.