Introduction

The concept of increasing wealth-income refers to wealth that is either inherited, gained through the taxation of income, or the amount of money someone makes. The total wealth-income of a country refers to the total of all individual income in that country multiplied by the proportion of wealth-income to GDP.

What are some ideas for how we can increase our wealth-income?

1) Taxes

Taxing income more heavily would encourage people to invest more of their money instead of spending it. Taxation is one of the key ways a government can influence the wealth-income ratio by altering the proportions of consumption and investment. As a result, changes in taxation could make large differences to our wealth-income ratio. For example, raising taxes significantly is not feasible as our economy is over-taxed by other countries’ governments and businesses.

2) Consumption

Consuming less is one way of increasing our wealth-income ratio. This would reduce the proportion of wealth spent on consumption and encourage people to invest more money. However, if we consumed less, we would be left with less disposable income to invest in wealth-creating activities.

3) Government spending

Spending less money on welfare and other government services could help increase our wealth-income ratio by shifting the proportion of spending away from consumption and towards investment. However, this would create more call on the government to create wealth in the country such as infrastructure investment.

4) Investment

Investing more in assets such as stocks and shares or buying property would increase our wealth-income ratio. However, this only works if the assets appreciate over time. There are many examples of people investing in assets which later decreased in value, so this is a risky way to increase our wealth-income ratio.

5) Buying assets

Buying assets could increase our wealth-income ratio by creating more wealth. However, if the amount of money spent on buying assets like property and shares were too high, then it would not increase our wealth-income ratio as much as we might hope.

Conclusion

Although it is possible to increase our wealth-income ratio, there are many factors we need to consider. However, the main problem we face is raising the proportion of wealth that is invested instead of spent. To do this we need an incentive to do so – otherwise it is difficult to change a spending habit.