World 11 · Wealth, work & life · Lesson 1 of 11

What wealth is: net worth and more

Net worth is one measure of wealth. It leaves out some of the things people value most.

6 min read · Level: Foundation · Free — no account needed to read

The idea

In financial terms, wealth is what you own minus what you owe: your net worth. It is a useful number, because it shows what you have built and what would remain if your income stopped. Wealth and income are different: income is a flow that arrives and leaves; wealth is a stock that accumulates, or does not, over time.

But net worth leaves out much of what people value most. Skills and health, which produce future income. Relationships and community, which support people through hard times. Time and freedom, which money can buy but cannot replace. Many traditions describe these as forms of wealth too. A full picture of wealth includes both what is on the balance sheet and what is not.

Why it matters

Measuring wealth only by net worth can lead people to trade away health, time or relationships for a higher number. Measuring it only by the other things can leave people exposed. A useful view keeps both in sight.

A real example

The situation

Two retired neighbours have very different net worths. Walter has far more money; Esther has less but a close family and good health.

What happened

When both face a long illness, Walter pays for excellent care but is largely alone; Esther’s family and friends rally around her while her smaller savings cover the basics.

The takeaway

Each was wealthy in a different way, and each kind of wealth did a different job.

How people actually behave

People tend to measure their own progress by the most visible number — income or possessions — and underrate the less visible forms of wealth until they need them.

Common mistakes

• Measuring your wealth only by what others can see you own.
• Ignoring net worth entirely because “money isn’t everything”.
• Trading health or relationships for a higher balance without noticing the trade.

Questions to think about

• Besides money, what forms of wealth do you have?
• Which form of wealth would you most like to grow in the next five years?

Try it: Two balance sheets

1. Estimate your financial net worth: what you own minus what you owe.
2. On a second sheet, list your non-financial wealth: skills, health, relationships, time.
3. Note which sheet you have been investing in more.

Words in this lesson

• Wealth — What you own minus what you owe — and, more broadly, the security and choices that brings.
• Net worth — Everything you own minus everything you owe.