Net worth

“ Capital assets are fixed assets—the plant and those assets in which the capital must first be invested before revenue can accrue. When the group of capital liabilities is shown it usually includes both the long-term obligations incurred for raising capital as well as the capital stock. This unfortunately does not recognize a distinct section for the net worth items. ”

“ I want property that earns money. You might say that there is water in Western Union, and so there is. There is water in all this property along Broadway. This whole island was once bought for a few strings of beads. But now you will find this property valued by its earning power, by its rent power, and that is the way to value a railroad or a telegraph. So it is worth what it earns now, a capital that pays seven per cent.”
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“That would be $100,000,000?”
“Yes, and it is worth much more than that, because there are a great many assets.” ”

“ In the fourth or highest class are the landed proprietors, the aristocracy of the land, the richest member being worth as much as four or five million dollars, with an annual income of at least a quarter of a million. ”

“ I have long borne the profitless incumbrance of nominal and ideal wealth. My income has been cruelly estimated at seven, or, as some will have it, eight thousand pounds per annum. The profession of which I am a Member, my dear THOMAS, has taught me to value facts infinitely more than either words or reasons. I shall save myself, therefore, the mortification of denying that I am rich, and refer you to the constant habits, and whole tenor of my life. ”

“ Likewise, social changes, new needs, the growth of population, increase the net income of wealth, or the rents of a business. The basis of capital value is income, and whatever be its cause, political or economic, material income can and will be capitalized and added to the market value of the privilege, wealth, or industry on which the income is conditioned. ”

“ With that thought let us consider the value of the control of wealth. If a farm worth ten thousand dollars is mortgaged for five thousand dollars, its economic worth is ten thousand dollars after as before the mortgage, but the equitable claim is divided into two shares of five thousand dollars each. The value of the property [Pg 363] right cannot, in a reasonable view, be greater than the value of the economic wealth it covers. ”

“ The real worth of money remains unchanged, as long as the proportion of the quantity of existing money to the quantity of existing wealth or available labour remains unchanged.
If the wealth increases, but not the money, the worth of the money increases; if the money increases, but not the wealth, the worth of the money diminishes. ”

“ For example, let property of the value of ten thousand pounds belonging to A, be lent to B, a farmer or manufacturer, and employed profitably in B's occupation. It is as much capital as if it belonged to B.⁠A is really a farmer or manufacturer, not personally, but in respect of his property. Capital worth ten thousand pounds is employed in production—in maintaining labourers and providing tools and materials ”

“ If a property earns only its operating expenses, including therein proper depreciation reserves, taxes, and such a percentage on its actual invested capital as could be earned by that capital if invested in good non-taxable bonds or other like security, it is worth no more than its physical property is worth. If it earns more than that, it is due to the franchise, going concern, or other intangible elements of value, and, to determine that value, capitalize the surplus. ”

“ B***, who is one of our first citizens, has always been at the head of the very first society, and is worth, at least, half a million of dollars in bank stock, independent of a very respectable real estate. ”

“ In common discourse, wealth is always expressed in money. If you ask how rich a person is, you are answered that he has so many thousand pounds. All income and expenditure, all gains and losses, everything by which one becomes richer or poorer, are reckoned as the coming in or going out of so much money. It is true that in the inventory of a person's fortune are included, not only the money in his actual possession, or due to him, but all other articles of value. ”

“ He is an ice dealer in New York City, and has done a good business for thirty years. I cannot say how long he has been spending this dollar a day, but I do know that one dollar earned each day, with interest, will make a man worth over $475,000 within fifty years. There is enough wasted by the average person within twenty-five years to make any family well off. ”

“ If men anticipate that the value of the income, which is a fixed sum of dollars, is to grow less in the future, then the present worth of the bearer of that income will shrink to an extent greater than the "pure rate" of interest would call for. ”

“ Income being derived from the use of capital, the conversion or transfer of capital always produces income. 2. Mere appreciation of capital value does not produce 'income,' nor mere depreciation 'outgo.' 3. Net income is the difference between actual 'income' and actual 'outgo.' 4. ”

“ I make three assortments in fortune—first-rate, second-rate, and third-rate fortunes. I call those first-rate which are composed of treasures one possesses under one’s hand, such as mines, lands, and funded property, in such states as France, Austria, and England, provided these treasures and property form a total of about a hundred millions; I call those second-rate fortunes, that are gained by manufacturing enterprises, joint-stock companies, viceroyalties, and principalities, not drawing more than 1,500,000 francs, the whole forming a capital of about fifty millions ”

“ Even here he merely indicates that he considers the annual income of a society as its real wealth: whereas most economists prior to his time had conceived wealth as the accumulated stock of durable goods which a society possesses. ”

“ Every extravagance that the man of 100.000 or 1,000,000 dollars indulges in, adds to the means, the support, the wealth of ten or a hundred who had little or nothing else but their labor, their intellect, or their taste. If a man of 1,000,000 dollars spends principal and interest in ten years, and finds himself beggared at the end of that time, he has actually made a hundred who have catered to his extravagance, employers or employed, so much richer by the division of his wealth. ”

“ Those who possess money are in a position to take toll, in values, from those who wish to get rid of the goods which they have produced, and to get hold of the goods which they wish to consume. The holders of money do this by means of the money, and under the laws of economic imputation, these gains are attributed to the money itself, first in the form of a rental value, and sometimes, under conditions later to be discussed, as increments to capital value. ”

“ Subject, however, to these contingencies, personal qualities are wealth, and wealth of the most valuable kind. The amount of the revenue derived from their exercise in England, far exceeds the rental of all its land.
The words wealth and value differ as substance and attribute. All those things, and those things only, which constitute wealth, are valuable. ”

“ Senior says that of the income of £4,000 which a lawyer or a doctor draws, only £40 are wages for his labor; £3,000 are a rent paid for the possession of extraordinary talent, or for his good luck, and £960 as the interest on his intellectual capital, which is also the chief element of wealth. ”

“ In this way a first approximation will be made to the income derived from 'living' capital, and greater accuracy may be then attained by considering in more detail certain kinds of income, and also certain comparatively permanent sources of 'wealth' (personal) which do not yield income. ”

“ The real value of the total accumulations of the whole group is perhaps about $10,000,000, or $5,000 a piece. Pitiful, is it not, beside the fortunes of oil kings and steel trusts, but after all is the fortune of the millionaire the only stamp of true and successful living? ”

“ The present value of the industrial stocks, bonds, real estate and other income-bearing principal property left you by your father is $8,540,000. This, invested at an average a trifle under seven per cent—for which all items will be sent you upon your request—bears income for this year of $597,000. ”

“ Yet it is a fact that there are very few financial houses of great wealth. All of the very greatest fortunes of the country, and in fact most of the great fortunes, have been made, not in finance, but in trade, industries and inventions. ”

“ Never before in the history of finance had it been made possible for men of modest means to further a charitable work, a noble work, a work appealing to all the highest aspirations of humanity and creditable to every finest instinct of the human heart, and at the same time to reap an enormous profit! And the price was only twenty-five dollars a share—while they lasted! ”

“ The most conspicuous method yet suggested for realizing such a Value level takes the specific form of a proposal to determine Money standards by frequent comparisons with the Price level of simple types of Wealth. Resting nominally upon the Value in Trade of such staples, this method rests fundamentally upon the Economic fact that Labor, as the continuous producer of all Wealth, is the real source and regulator at all times of all Values in the channels of Trade, and that Money is the measuring rod and its terms the language. ”

“ Mansions, laces, diamonds, furniture, horses, carriages, and the like are investments rather than expenditures. Receptions and banquets may be classed with gifts. He must be an industrious man who can, with his family, eat, drink, and wear out $50,000 worth each year.”
“But is there not the pleasure of accumulation itself, Mr. ”

“ Sources of Wealth.—The large majority of persons of wealth have won or inherited their property from the economic industries of manufacturing, trade, commerce, and transportation, or real estate. Certain individuals have been fortunate in their mining or public-service investments; others make a large income as corporation officials, lawyers, physicians, engineers, and architects, but most of them have attained their success as capitalists, and they are able to maintain a position of prominence and ease because they use rather than hoard their wealth. ”

“ Economy in personal and family expenditures was the text from which the lesson was drawn.
In my prosperous days when I made large annual profits, I did not realize how foolishly extravagant was my scale of living, for every year I was adding a handsome amount to my accumulations which were steadily increasing, and yet, looked at from the standpoint of this clear-headed, successful business man, I was expending far more than what should have been regarded as my income. ”

“ Investment is a pecuniary transaction, and its aim is pecuniary gain,—gain in terms of value and ownership. Invested wealth is capital, a pecuniary magnitude, measured in terms of value and determined in respect of its magnitude by a valuation which proceeds on an appraisement of the gain expected from the ownership of this invested wealth. In modern business practice, capital is distinguished into two coördinate categories of assets, [Pg 353] tangible and intangible. ”

“ Lastly, let us look to the general question of the results of the accumulation of wealth in the hands of different classes. Roughly we may divide three classes of money-earners: the lower, who receive weekly pay, and are tempted to spend it all by the certainty of poor relief when needed; the middle, who receive yearly pay, and must save if they are to avoid losing caste in late life; the upper, who make large but uncertain profits by organising work, or by financial manipulation, regular or irregular. ”

“ In business accounts, for example, whatever will bring a price to the owner is accounted Wealth, or Capital as a sub-classification of Wealth, whether the object of the price be a building, a domesticated animal, a slave, a vacant building-lot, an unused agricultural area, or an improved and cultivated farm. Some of those items of “wealth” or “capital” do belong, Economically, in the Wealth category, buildings and domesticated animals being among them; but many fall wholly or in part into one or the other of the two other categories, Labor and Land. ”

“ A baby who could be reared to take a place in the class X would have a capital value of thousands of pounds. The capital value would be like that of land of different degrees of natural advantage, but none of it yet exploited. ”

“ Their wealth is in all sorts of stocks, in all sorts of machinery, in all sorts of buildings, in possessions of all the sorts possible in a land of bustling commerce and money-making industries. They have made their money in a hundred different ways, or have inherited it from fathers who amassed it in enterprises too numerous to imagine ”

“ Gifts of all kinds, expenses of all kinds, outgo of every description, must come from new sources of revenue; my fortune and its income and the surplus over the previous year’s outgo must be treated as a sacred fund of which I was merely the trustee. That rule has put me often in straits, has forced me to many money-making measures [134] that in the narrow view would be called relentless. But to it the world owes my highest achievements, as a financier and industrial leader, and to it I owe the bulk of my fortune.
The brain earns in vain, however hugely, if the hands do not hoard ”