The scarcity and absence of readily available goods and services to meet urgent Wants, is poverty. Its opposite, wealth, is the relative abundance of goods and services to meet urgent Wants. The only way for Man to become more wealthy and less impoverished is to produce more than he needs for immediate consumption. Saving is that amount of goods that are produced, which are not consumed immediately and is critical to wealth creation. Savings last as long as they remain unconsumed. In a fixed income scenario, saving is achieved by reducing consumption. However savings can also be made by producing more than is immediately needed. No reduction in consumption is actually necessary. A wealthier person will have more saved resources than a poorer person.

Imagine a man (Robinson Crusoe) who has been ship-wrecked alone, on a desert island, with only the resources that he can find around him. His needs are great but he has extremely limited ways to satisfy those needs. He has no shelter, food or water. If he wishes to survive, he must find ways to satisfy his Wants. Imagine a scenario in which this man does not rest except for the time he sleeps and spends all the rest of his time, getting water, food and maintaining his shelter. If he is unable to save anything, his situation is incredibly precarious. The slightest downturn in his productivity may lead to his demise. He must save some resources to create the time for him to make a more permanent shelter or make a more productive food or water supply. His savings allow him to invest in some area of production, so that he can improve that process, so that he can create more time to improve another process.

But what is an improvement in his process? This depends to a certain extent on what his current methods are, but if his water production is drinking at a stream, then an improvement could be creating a storage container allowing him ready access to water at his shelter. This would be a tool. If he picks berries for food and builds a ladder to get to more abundant berries that are too high to reach, then his ladder is a tool. If he wishes to catch game by building a trap, his trap is a tool. Once he is catching game, using his trap, he may want to skin the game to make clothes. This will require tools. Each of his productivity improvements gives him time to produce something which will satisfy a previously unsatisfied Want. He becomes wealthier. All wealth creation is like this, even in our vast, complex, interdependent world.

The tools mentioned above, the ladder, the container or trap, do not come into existence by magic. They must be made. This requires time. The time spent producing a tool is time not spent on directly satisfying another Want. The only way that this time can be spent is if there sufficient savings to to sustain the isolated man, while he builds the tool. A ladder might make him ten times more productive at berry picking, but if he can’t save up a week’s worth of resources, then he will probably opt to build a container for his water first, which might only take him a day. He will attempt the project with a higher chance of success and not attempt the project which will be guaranteed to fail.

If a group of engineers, who independently assemble parts into cars in small facilities, come together and collaborate to each assemble some part of the car in a larger facility, then this changed process can be considered to be a factory. A factory is a large complex tool. The factory required time and effort to bring it into existence. It required savings. While the factory was being constructed, it produced nothing. Those building it needed to be sustained until it was complete. The sustenance came from prior savings. If the factory project is successful, more or better cars will be produced, potentailly leading to greater satisfaction of Wants.