Hello Hive Learners Community! Welcome to my blog. Wealth is an integral part of the economic statistics of a country. We can't ignore it during the evaluation of development. Its significance can be understood by understanding its terms and boundaries.
According to the United Nations, wealth can be defined as,
A monetary measure which includes the sum of natural, human, and physical assets.
According to Investodpedia (a famous finance-related website that has won many awards around the world due to its finance related market data), wealth can also be defined as,
It's measured by taking the market value of all physical and intangible assets owned and then subtracting all debts. It can be seen in either absolute or relative terms.
So it can be easily calculated that wealth can be tangible or intangible. Tangible wealth includes our physical assets like our capital in terms of money, properties luxurious vehicles, animals, etc. Intangible form of wealth means it can be in the form of digital assets. Both Intangible and tangible assets accumulate in Wealth.
Pic from Pixabay designed by Adobe Express
Division of Wealth
All human beings can't be rich, or they can't be poor. Nature has kept the wealth difference between all human beings. About 5% of wealthy people can be defined as rich dude or elite class. While 95% of the world's population is average or devoid of the basic financial status of wealth hence we defined them as poor dude or middle or poor class. This unfair wealth system is found from the beginning of this planet. To make this wealth division system better and better and to improve the standard of life, different nations have proposed different methods. In developing and developed countries, I have studied the following two wealth systems.
- Fair Wealth Earning System
- Unfair Wealth Earning System
These two systems have their pros and cons. With the Advancement of Knowledge and several financial experiences from life, I can briefly state the above systems in the following directions.
1. Fair Wealth Earning System
In this system, all people were exposed to fair opportunities for earning wealth regardless of their classes, whether they were poor, or they were rich. There were no restrictions on earning money, and everyone could earn whatever he or she wanted. It was like Darwin's Theorem, "Survival of the fittest". Those persons who were fit availed more opportunities and earned more, while those persons who were weak in learning were unfit, availed fewer opportunities, and earned less wealth. Finally, we found that nature's decision was dominant here; everyone can't be rich whether we provide them equal opportunities or not. But it was a good system where everyone was satisfied. This fair wealth-earning system still can be found in many developed countries. Theoretically, we all can avail of what we can strive for if we ignore other factors.
2. Unfair Wealth Earning System
In this system, people were facing biases or favoritism in availing of earning opportunities. Mafias and many corrupt people were promoting opportunities by getting money. In this system, the poor were unable to avail of any Earning opportunity because there were no merit criteria and no transparency. Additionally, they were unable to provide money for availing opportunities to the mafias. Hence, the poor were becoming poorer while the rich were becoming richer. This unfair wealth system is currently present in many developing countries.
Updated Wealth Management
Currently, different governments are experimenting with different schools of thought regarding equal wealth management. Some governments are capping the earnings. People will be able to get a fixed amount of profit. They are not allowed to earn more Wealth so that everyone will get an opportunity to avail money. Although this updated wealth management has reduced inequality in wealth earning process, better social outcomes in the form of improvement in education and health sectors, and prevention of assets collections in one pocket. Although it is good wealth management in any country, it still has many flaws.
With restrictions on Capitalism, you are going to demotivate investors and businessmen. The freedom of money is snatched, and no one will be ready to stick his or her money in a business that has a cap on the wealth of the government. There are chances of economic collapse if investors stop their investment completely.
Areas of Improvement in Wealth Management
Instead of capping someone's wealth and putting restrictions on more earnings, we need to make policies that are for the welfare of a country and essential for its progress. We need to work in the following fields for better Capitalism.
- Tax System:
A country with a poor tax system cannot flourish on this planet. We all are facing the worst inflation, and a poor tax system can be its biggest reason. When we have tax concessions for mafias and looters while double tax for the poor, then we can't expect any betterment in the economic graph of a country. We need to bring everyone into the tax system according to a fixed ratio of his or her Wealth. A strong tax system is the first solution in a fair wealth-earning system that can direct a country into a progressive nation.
- Resources Availability
When the elite class is getting benefits from country resources, we need to bring people from the poor class as well to avail same resources. No discrimination in resources between these two classes will make the foundations for the development of a country.
Final Thoughts
The capping on wealth earning system has several pros, but we can't ignore its dangerous cons. Ethically, we can't put taboos on someone's earning source. We need to improve other fields like the tax system and availability of resources if we want to make wealth management better and better. Moreover, we should respect the freedom of money, which is a basic right for each citizen. We should not freeze someone's assets just because he or she has already reached an earning limit. For me, a fair wealth-earning system is good if we add strong taxation and more availability of resources for poor people. There will be penalties and punishments if someone manipulates their wealth status.
