Wealth concentration leads to the rich getting richer, with money flowing to individuals, companies, and countries that already have wealth. This can lead to economic expansion through job creation and investment, but it also means that money is not equitably distributed. The concentration of wealth can occur through income, inheritance, or other means, and it can also occur on a national or global scale.
When wealth concentration is in effect, people, companies and countries that already have wealth status attract even larger sums of money. People with wealth have the option of continuing to grow a personal empire internally or possibly perpetuating the growth of an entire region. This economic expansion can occur through job creation or investment in the development of new buildings and roads. National and global statistics on concentrations of wealth are often evaluated by economists and researchers.
Under the premise of a concentration of wealth, there is no equitable distribution of money among the citizens of a nation or of the entire world. Instead, the notion that the rich only get richer is underscored. Wealth can mean different things to different people, but it usually includes cash; investments, including stocks, bonds, and other financial securities; real estate and other assets. In some cases, it is evidence of all of these items in connection with debt owed, such as mortgage debt or credit card loans. The wealthiest families have historically had the highest percentage of securities listed on financial markets, as was the case in the United States in 2007 according to Who Rules America?.
It is common, although not essential, that the concentration of wealth in a country belongs to individuals who generate the highest income. This represents the salaries that people can often earn from senior executive positions, such as the CEO of an organization. Income can also be earned through investments or dividends, which are payments of cash and shares of investments or rental properties. However, many well-to-do people inherit wealth or obtain it in ways other than income. The concentration of wealth in a country may be limited to the upper class, the highest paid executives and business owners, and the recipients of wages and salaries.
It is possible that the concentration of wealth occurs not only in individuals but also in different countries. High net worth individuals are responsible for creating some of the richest nations in the world, as the most developed countries tend to be those with the largest number of the world’s richest people. Alternatively, underdeveloped countries are those that tend to have areas of poverty but also opportunities for growth. It is possible for economies to expand and more wealth to be attracted to an underdeveloped nation, increasing that country’s influence in the concentration of wealth.
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