Imagine two people. Let’s call them Bill and Ben. Bill is a mid-ranking investment banker who clears £500,000 a year after tax. Ben is a gardener who takes home £25,000. Who is better off? If we judge them by their income, then Bill is clearly richer — 20 times richer, to be precise. But who is wealthier? For that, you’re going to have to know more about their stock of assets and broader circumstances. In national accounting terms, Bill’s £500,000 salary is the equivalent of GDP. It is the "flow" of income earned in a year. But, as any mortgage lender knows, that doesn’t tell you anything about his wealth or his salary next year or the year after that. Did I mention that Bill is up to his neck in debt after a crippling divorce, or that he has an expensive cocaine habit? He’s sold off most of his assets, including his vintage Harley-Davidsons. All he is left with is a costly mortgage and several payments on his (scratched-up) Porsche. At 59, he’s also washed up at work. In fact, he i...

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