Final answer:
The biggest wealth-building tool is income, as it allows for savings and investments that can grow over time. Wealth includes all assets after subtracting debts and can be built through various investment vehicles. Consistent saving and investing over time is the reliable method for accumulating wealth.
Step-by-step explanation:
The biggest wealth-building tool is often considered to be income. This is because income acts as a flow of money received, which enables individuals to save and invest. Investments can then grow over time and contribute to one's overall wealth. Understanding the difference between wealth and income is crucial, as wealth is the sum of all assets after subtracting debts, and it can significantly grow through strategic investments and savings. On the other hand, a savings account offers a more secure, but lower return, and inheritance is less predictable and not a result of one's own financial decisions.
Households have various options for investments such as bank accounts, certificates of deposit, money market mutual funds, bonds, stocks, and real estate, which can all contribute to overall wealth. Long-term accumulation through consistent saving and intelligent investing typically provides a reliable method for wealth accumulation.