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by nix23 2101 days ago
>Income is money earned over some time period, how does one "combine" that with investments and assets?

Because the combination of all that is what capital is?

2 comments

If I earn $10 per month, have $20 in capital, and $15 in personal assets, how do you combine those numbers into a single number? What does that single number represent?
The number is called "net worth" and is slightly complicated if you're married or own a lot of illiquid assets. It also has debt and other liabilities subtracted so a house on mortgage or leased car, or company owned assets do not count, for example.

It does not count control of corporations and political power, which can be important as well. (But tend to go hand in hand to a degree.)

There's also gross worth which is a total lifetime worth. This would be high if you used for example expensive education. But then this one is much more nebulous.

"Net worth" is perhaps capital + personal assets, but I don't think it includes anything like "yearly income" or "monthly income"?
Net worth is only assets and liabilities. Income doesn't get factored in to that until it's earned.
But what's the formula?