Posted by: admin : Category: Wealth is the possession of valuable assets. These assets may be cash or take other forms. Some assets may be highly liquid, meaning they can be converted into cash readily. Examples of such assets include shares or bonds. Other assets embodying wealth may be less liquid, meaning a certain amount of time and effort is required to translate them into cash. Examples of such assets might be a Van Gogh painting or an ancient Roman vase. To realize the full value of such assets, specialized buyers would have to be sought and perhaps an auction would need to be arranged. All of this would take significant time and effort.
Formally, a person’s wealth could be defined as the sum total of the value of their current assets minus the sum total of the value of their current liabilities. It is possible for a person or company which has large positive wealth to experience severe economic difficulties in the short term is too much of that wealth is stored in illiquid assets. In such cases, the illiquid assets may need to be disposed of quickly at below the market rate in order to raise temporary finance.
Some governments, such as France, impose a tax on wealth, while most governments prefer to tax current income streams instead.