The wealth of an individual is his total stock of tangible or intangible possessions which have a market value. This implies that they must be capable of being exchanged for money or other goods, i.e. the ownership in them must be capable of being transferred. It also implies that we not only include physical possessions, such as a house, stocks and shares, bank accounts, etc., but also his business and professional connections, together with the value of particular skills which he may possess. These latter forms ofwealth have a market value in the sense that they can be exchanged in the relevant market. If it is desired to distinguish between the tangible and intangible types of wealth, the terms human wealth and non-human wealth are often used. A basic property of wealth is that it is a means of generating income, i.e. income is often regarded as the return on wealth. It follows that the value of a stock of wealth is given by the present value of the flow of income it generates.
|Reference: The Penguin Dictionary of Economics, 3rd edt.|