I was thinking about a game that combines RPG with a merchant trading system... the problem I am having though is how to deal with the two completely seperate levels of wealth. On the one hand, they should have a manageable amount of wealth to purchase things such as equipment/upgrades/consumables etc... on the other hand they need large amounts of wealth to do things such as purchase new transports/hire shopkeepers/transporters/farmers/buy property/buy expensive goods/etc.

It wouldn't make much sense to have two separate currencies, but it if they had the money to purchase expensive items all personal needs would be trivial, but if they only had enough to make personal belongings non-infinite they wouldn't have enough to purchase the expensive items.

Payday 2 pays the player for heists in two different ways: Some of the money goes into their pocket, to be spent on gear and upgrades, while the majority goes into an "off-shore account" which can't be spent. If your merchant/adventurer has to buy his swords and potions out of a "petty cash" fund while keeping the bulk of his wealth invested in his business, then you could reward good market decisions and not totally devalue the "windfall" earnings that come from picking a bandit's pocket during a quest.

If the player belongs to some sort of 'Merchant Guild' (and is competing against other merchant guilds), and it's the guild's money being used for running the merchant business, then he can't spend the guild's money on his own equipment. He'd have a guild-owned 'Business Fund', measured in gold coins, and his own personal purse, also measured in gold coins. You can optionally replace 'Merchant Guild' with, 'Wealthy merchant training the player to replace become his successor, and hasn't actually transferred his wealth yet', or 'King's money trusted to you', or 'Loan from Investors/Bankers/Other-Merchants that, by contract, can't be spent on personal items'.

You really are having two separate currencies, because they are spent on different collections of purchases and are kept separate from each other - they just visually, to the player, look like they are measured in the same unit of measurement (gold coins).

If you need, you can then provide methods of transferring from the business account to the personal wallet or vise-versa, with limits imposed by the game. e,g. You get 1% of all profits put in your purse, the other 99% of profits get automatically re-invested in the business, or you invest extra from your personal wallet into the business when you choose.

I rather like Servant's idea of the merchant guild. The majority of the gold you earn goes straight to your guild account as "credit" towards guild related purchases. It hides the two currency format behind meaningful in world reasoning.

Another take on this if you'd rather not put a merchant's guild in your game world. Early in the game your adventurer is introduced to a financeer who makes what sounds like a good offer (for interest on gold gained or an initial investment) but doesn't realize right away it requires him to pay x% of his earnings, leaving him little in the way of spending money. Later in the game the financeer opens up options for spending that money on larger purchases. You could also introduce risky "under the table" quests you complete where you keep all the gold.

Making the player wealthy isn't necessarily bad, and it doesn't imply that buying ridiculous amounts of personal gear becomes a strategy to become more powerful.
Buying redundant equipment should be indistinguishable from buying non-equipment trade goods for the warehouse.
Allowing the player to buy harmless luxuries (e.g. a clean suite at the inn instead of sharing fleas with strangers) is a reward that doesn't imbalance the game.

Most importantly, carrying capacity is limited, so if you don't shoot yourself in the foot by making available miniaturized or no-slot expensive equipment (e.g. "condensed" potions and other consumable items or D&D-style flying swords) wealthy characters are simply enabled to buy anything they see fit in order to optimize equipment choices against the same weight and slot budget as poor adventurers.

For example, without extra arms the marginal utility of the third sword or the second shield is quite low: unless the player wants to bring a spare, he should carry something else instead. A wealthy character might own a great variety of weapons, but most of them will be kept at home.

Does it really matter? If I rob my own business of cash to buy more and more expensive gear, then that means my business suffers. And there is only so much 'personal' stuff I can spend money on, eventually I'll run out of useful things to buy.

If spending $500 on a new weapon is more useful to me now than saving it up the $500000 I need for my next warehouse, then I much rather be able to spend that $500 now on what I need and save up for the other things after.

In my mind splitting funds is just something that might annoy a player. It is their in-game money, let them spend it as they see fit. Just balance the internal economy well enough to support it.

One of the old might and magic games had two currency gold and mega credits. Mega credits were only used upgrade your castle. But then that was a two currency system.

You could just scale costs accordingly. Rare valuable items might be worth as much or more than your entire trade guild . That would give the game a little more sense of realisim. It might be that a single drop from the fountain of youth you could trade for a castle and its surrounding lands.

Or have a guild vault were all your business earnings go into and you can only take a percentage for yourself.

Even if it seems like your merchant is exceedingly rich, this isn't necessarily something that couldn't work or something that's very unrealistic.

If you look at Victorian England, a worker would typically get around 10 shilling per week (25 guineas per year), a lawyer or doctor would have around 500-800, and a merchant would have upwards of 10,000 guineas. Some people spent more money going to the opera on saturday evening than others earned in a year. Some people had a walking staff that others couldn't afford with their lives' earnings. Depending on what source you ask, a clerk or officer might spend approximately as much money for beer as his maid's total salary. Or, more...

Just make some things that the exceedingly rich merchant would want exceedingly expensive.

EDIT:

To give some examples from literature (maybe not 100% accurate, but probably good for a general idea):

In The Hound of the Baskervilles, the Baskerville fortune of 740,000 guineas is mentioned as being "so gigantic a sum, he was known to be rich, but we did not know how very rich he was". On the other hand, Stapleton gives two guineas as tip to a cab driver -- in A Study In Scarlet, it is revealed that Dr. Watson earns eleven shillings and sixpence per month (roughly 1/2 guinea!).

Holmes pays 1 shilling per day (1/21 guinea) to the Bakerstreet Irregulars in The Sign of the Four (which is so much money that they're almost killing themselves to be hired).

To an extent I would agree with you samoth, but the problem is that in a video game, the player doesn't spend wealth on non-utilitarian objects. For example, in real life a person can go and get a hamburger at McDonals for $1.00, or they can goto a restaurant and buy a burger for $8.00, both hamburgers are functionally identical but in real life people enjoy the restuant experience enough to pay the difference. In a video game the only way to make a player buy a more expensive burger is to make it function differently... the opera example, the real life experience is recreation, players don't pay recreation costs for characters in a game unless it provides a tangible benefit... so It is impossible to make quality of life more expensive for richer players because players don't care about their characters quality of life... but If there where a way to make this work it would be interesting.

Recreation or joy or "better stuff" could be influencing game mechanics, why not?

In many games, food can restore morale, remove dread, heal, etc. Food that "tastes better" (cookies, cakes, cooked fish) heals more in many games than food which you just pick up and swallow. Sleeping in a bed at an inn could restore your health at 3x normal rate. At a premium inn (5x as expensive) that's 4x normal.

You might want an iron sword. Iron could be 100 times more expensive than bronze (not even very unrealistic in a medieval setting). You might need a breeding bull or a stallion, and they are 50 times more expensive than a cow or a horse. Since when you don't have a particular special breeding bull, what comes out is "low quality cattle" that doesn't sell (unless you are level 200 animal handling).

You might have to hire a bouncer/bodyguard which gets more expensive the more money you have (because the bigger your purse, the bigger the thugs that will jump you).