Financial Wealth : The Value Of All Marketable Assets

1088 Words Oct 15th, 2015 5 Pages
First, though, some definitions. Generally speaking, wealth is the value of everything a person or lineage beat, minus any debts. However, for purposes of studying the wealth dispensation, economists define wealth in terms of marketable assets, such as real estate, stocks, and bonds, leaving off consumer durables like cars and household items forasmuch as they are not as readily converted into cash and are more valuable to their owners for use purposes than they are for resale (see Wolff, 2004, p. 4, for a full parlance of these delivery). Once the value of all marketable assets is determined, then all debts, such as home mortgages and credit card debts, are abstract, which yields a person 's net worth. In addition, economists use the concept of financial wealth -- also referred to in this document as "non-home wealth" -- which is determine as net worth minus net equity in holder-occupied housing. As Wolff (2004, p. 5) explicate, "Financial wealth is a more 'fluid ' concept than marketable wealth, since one 's tenement is difficult to convert into cash in the deficient term. It thus reflects the resources that may be immediately convenient for consumption or various forms of investments."

Household net worth or wealth is an important defining factor of economic well-being in the United States. In times of economic hardship, such as unemployment, illness, or divorce, a person’s or household’s financial assets (e.g., savings accounts) are an additional source of income to…
Open Document