Compare money with wealth and income, Macroeconomics

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Compare Money with wealth and income

Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real estate). Another individual may have a lot of money however no wealth. This would be the case if an individual with no wealth borrows money from a bank. She would have money (for instance in the form of a deposit in the bank) however no wealth as this deposit exactly matches the outstanding debt. Be careful with this distinction: do not say "Anna has a lot of money" if you mean that Anna is wealthy.

Money is not the same as income and income is not the same as wealth. Income is a flow (for example is currency units per month) while money or wealth is a stock (measured at a particular point in time).

 


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