Wealth Effect – What Is It?
The wealth effect is a commonly understood economic term that refers to the increase or decrease in spending as a result of consumers’ perceived increase (or decrease) in wealth. These days, when it comes to wealth, it seems that it’s all about perception…
For instance, if people are spending a lot, the “perception” is that there must be a healthy “wealth effect” because spending is up. However, just because people are spending doesn’t necessarily mean “wealth” or “wealth effect” is increasing? This is because spending doesn’t require wealth these days and shouldn’t be an indicator of what’s referred to as the wealth effect.
In our current consumption culture, the impact spending has on the wealth effect is becoming less and less important because spending these days doesn’t require wealth… just credit. And that’s where the trouble begins…
The Wealth Effect Today
Leveraging tomorrow’s income (by using credit) to buy things today would – according to the current definition of the wealth effect today – imply there’s a corresponding increase in wealth.
But is spending fueled by the use of credit a true measure of the wealth effect?
Wealth Effect
Spending fueled by the use of credit – in the long run – will ultimately have a negative impact on the wealth effect. This is because, as time passes, the payments for past purchases will eventually catch up with you and – as as result – lower your ability to spend in the future. The result, a decrease in the wealth effect.
Is there a way for you to spend while simultaneously having a true, positive impact on the wealth effect?
Here’s a hint – take a peek at the title of this website. Living like a banker – and generating, building, and accumulating wealth like a banker – is the answer. And you can discover how bankers live like they live right here – right now!
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Learn To Live Like A Banker Without Having To Be One!
The 3-video series “The Banker’s Secret To Permanent Family Wealth” will walk you through simple concepts you can begin to use – RIGHT NOW – to get on track to having a banker’s lifestyle without having to pony up the dough to start an actual bank. When you fill out the form – The Banker’s Secret To Permanent Family Wealth will show you:
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If the wealth effect is all tied to spending, The Banker’s Secret To Permanent Family Wealth will reveal for you how you can actually have wealth to spend, and still accumulate wealth at the same time. Sure… it may sound impossible. But it’s absolutely true!
Just fill out the form on the top of this page discover how your wealth effect can be more “effective” than you ever dreamed possible.