U.S. Consumer Wages, Income, Wealth and Savings Research Paper

U.S. Consumer Wages, Income, Wealth and Savings - Research Paper Example Wealth is the value of all assets owned by a person, household or nation net of all liabilities owed at a given point. Wealth can be in the form of real estate, businesses, liquid assets, money market funds, stocks, bonds and other securities. However, having great wealth is not an indication of great intelligence. A person, community or country is said to be wealthy if they posses more assets than liabilities (Wolff2 34). People often believe that it is not possible to accumulate wealth unless your earning is high. But in fact it is possible to create wealth on low income and not to have wealth despite a high income. The following are key ways of accumulating wealth (Marquis 14): Avoiding Debts In order to create more wealth one needs to have a net surplus each month. But when one borrows, he or she essentially uses his or her next month’s income to pay for this month’s expenses. Therefore, in order to get wealthy you must first clear your debts because once you are debt free, you can accumulate wealth. Diversification By putting all your shares in one company or even a single sector, you are likely to lose everything you have accumulated incase something goes wrong in that sector. Diversification makes it possible for individuals to have more than one source of income, and so they can have more wealth. Therefore to become wealthy, one must diversify across all categories of investment. Retirement funds It is very hard to work at an older age and make more wealth. Therefore to continue accumulating more wealth, one can save for his or her old age. Another ways of saving for pension is to open an individual retirement or a personal pension account. These may vary in rule but may come in tax breaks which will be a valuable boost for the funds. Emergency saving One should build up emergency savings to cover for any emergencies that may crop up in future. Even th e most prosperous people can hit a bad spell of bad luck such as illness or loss of a job and become in need of money. Therefore, to prepare for these cases one should aside some money that he or she can easily access. Monitoring your investments By monitoring your investments you are in a better place to recognize any losses that are likely to arise from the business you are engaged in. People who lose money that they have invested are those who do not monitor their investments but instead adopt an unthinkingly attitude to their portfolios. Consumer Wages and Income Income is the term that is used to describe the flow of money over a specific period and it is in the form of rates. Income is what people get through work, social welfare and retirement benefits. The United States Bureau of Census defines income as what an individual receives â€Å"on a regular basis before payments for personal income taxes, social security, union dues and medicare deductions†. Some of the fact ors affecting income levels in the US include: profession, education, wealth and race (Ryu and Slottje 67). Most Americans derive their incomes from their jobs. Professional earnings are normally determined by the law of supply and demand. Some professional specialties are normally in high demand but in low supply, thus making their income levels to be high. The complexity of a certain profession also determines the income for an individual. For instance, people who are involved in high-level complex Over the last three years, consumer price wages have had to deal with the issue of inflation, which