Wealth vs. Income

"That person has a high income," you might hear. "They're wealthy."

That might be true for the hypothetical person in question... but those are two different statements. Wealth and income aren't the same thing, even though they are often used interchangeably.

Why does the difference matter? Well, for one, if you'd like to become wealthier (who doesn't!) it helps to understand what these measurements are. Two, understanding the difference between wealth and income helps you understand more about the people around you— whether it's your family, your friends, or the (presumably) rich and powerful.

Put simply, wealth is a measure of how much stuff a person (or company, or country, etc.) has. Long ago it was commonly measured in things like number of goats and chickens. Today it's usually measured in money. ...Though it isn't only in the form of money. Wealth includes things like land, houses, and works of art.

Income is the amount of stuff you've gained over a given period of time, usually a year. The commonest form of income is wages from working. Almost everybody has earned those at some point in their lives, or will. But there are other forms of income, too. If you have money (wealth) in a bank account that pays interest, the interest is income. Similarly, if you own stocks or bonds that pay dividends, those are income. And if you buy a stock today for $10 and sell it tomorrow for $11, that $1 gain is income.

Mathematically speaking, income is a rate of change of wealth. ...Okay, does math and the phrase "rate of change" sound a bit scary? Are you having flashbacks to pre-calculus classes in high school? Think of it in terms of the simple analogy of a faucet and a bucket of water.

The water in the bucket is wealth. You can measure and describe the amount you have. It could be a few ounces, a gallon or two, 100 gallons, or 10,000 gallons. ...Okay, for the latter two it's not really a bucket anymore but a bathtub or swimming pool. That's fine for the purposes of analogy; some people have way more wealth than others.

The faucet is income. Or, more precisely, the rate of flow of the faucet is income. The faucet might just be dripping water— that's a small income— or it might be pouring, or it might be gushing.

Note that the faucet and the bucket are related, but not the same. They're related because if the faucet is only dripping water, the bucket will tend not to be very full. Likewise, if the faucet is pouring fast, the bucket will tend to be full. But neither of these are a guarantee. The bucket might already be full from wealth accumulated in the past even though the faucet today is only adding drips. Maybe the faucet's even shut off entirely. And conversely, the faucet may be pouring water into the bucket fast, but what if there's a hole at the bottom of the bucket that's leaking water out just as fast? 😰

These all correspond to common real-world scenarios about wealth vs. income I'll illustrate in a subsequent blog.

Band of Brothers, Ep. 8: The Last Patrol

Band of Brothers episode 8, "The Last Patrol", makes another pivot in the tone of the 10-part story. After the grimness and heavy wounds of the Bastogne campaign in episodes 6 and 7, the German army has been pushed back on its heels. There's still fighting, but a sense pervades the Allied forces fighting in France that it won't be much longer now. Soldiers are sleeping in beds (in commandeered abandoned house) and taking hot showers. They're also helping themselves to valuable things left behind, like silver flatware and pieces of art, and sending them home to their families¹. Instead of being titled "The Last Patrol" this episode could also be titled, "The Last Fuck Left to Give.'

Both of those titles also describe the main sub-plot of the episode.

Battalion has ordered Easy Company to take point on a risky mission under cover of darkness. The infantry are to cross the river in a divided city after midnight, infiltrate German-held territory on the opposite bank, attack what they believe is an intelligence command post, capture enemy soldiers as prisoners, and bring them back across the river to an Allied command post for interrogation.

Things go fairly well as the hand-picked members of Easy sneak across the river in inflatable rafts and infiltrate the city. Trouble erupts at the supposed intelligence post when an Easy man is wounded during the attack. It's really his own fault, but nevermind; it makes the mission suddenly way more dangerous. Now not only are the German soldiers awake, alerted, and starting to fight back, but Easy has to carry their wounded brother as well as one or two enemy soldiers they grab.

Back at the Allied command post it's discovered that the captured enemy soldiers are not high-value targets. They don't know anything useful. Many of Easy's officers register frustration on their faces. They were skeptical about this mission ahead of time, doubting the claim that the target was an enemy intelligence operation, but they kept their doubts fairly quiet— the mission was orders, not discussion. Now they know there's no value in saying "Told you so"... but their faces all say, "Told you so."

The next night Winters comes back to Easy Company's leaders with another set of orders from Battalion. Battalion wants another raid just like the night before, except this time on a different target building. Surely this one is the intelligence command post! Again, the commanders know better than to object out loud, but before they can even roll their eyes much, Winters adds additional instructions. He tells them choose their men... and instruct them to sleep all night. Winters will report to Battalion in the morning that the raid was unsuccessful, that the target building was unoccupied, and soldiers returned with no casualties.

For a total straight-shooter like Winters, that's... wow. Disobeying a direct order and lying about it to superiors is out of character for him. What that reveals (IMO) is that he's adopted a "short-timer" mindset. Although he's been an exemplary officer and is being groomed for more promotions, he knows the war is close to over and doesn't really care about a military career beyond that. His priority now is protecting the men he considers his brothers.

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[1] I've got to say, I'm really disappointed to see this representation of widespread looting being tolerated.