If you earn a gross salary of 100K+...you are 30+ yrs old, and you do not have 3.5M in assets,
You are an Under Accumulator of Wealth(UAW).
You are poor at building wealth
Let me explain:👇👇
You are an Under Accumulator of Wealth(UAW).
You are poor at building wealth
Let me explain:👇👇
How good are you in building wealth from your income?
You can either be a Prodigious Accumulator of Wealth(PAW) or an Under Accumulator of Wealth (UAW)
PAWs are builders of wealth. They are the best at building net worth compared to others in their income/age.
You can either be a Prodigious Accumulator of Wealth(PAW) or an Under Accumulator of Wealth (UAW)
PAWs are builders of wealth. They are the best at building net worth compared to others in their income/age.
To compute your expected net worth, use this simple rule of thumb:
(Pretax annual income * Age) / 10
Then subtract any inheritances and that is what your net worth should be.
(Pretax annual income * Age) / 10
Then subtract any inheritances and that is what your net worth should be.
For example, if you earn 100K per month, that's 1.2M per year.
Let's say you are 30 years and you inherited nothing from your parents.
This means you should be worth (1.2M * 30) / 10
That gives you 3.6M.
Let's say you are 30 years and you inherited nothing from your parents.
This means you should be worth (1.2M * 30) / 10
That gives you 3.6M.
If you have more than that in assets, you are good at building wealth from your income compared to your income and your age.
If you have low than this, you are poor at building wealth.
People earning less and younger than you may be doing better than you.
If you have low than this, you are poor at building wealth.
People earning less and younger than you may be doing better than you.
P.S.
This multivariate based wealth equation was developed after years of surveying high net worth individuals.
It's a simple rule of thumb that you can use to compute your expected net worth.
This multivariate based wealth equation was developed after years of surveying high net worth individuals.
It's a simple rule of thumb that you can use to compute your expected net worth.
Do note that personal finance is messier than spreadsheets and equations.
Our financial decisions aren't solely based on logic.
This should just be taken as a benchmark to know how you are doing financially.
Our financial decisions aren't solely based on logic.
This should just be taken as a benchmark to know how you are doing financially.
Obviously, there are a lot of assumptions made in this equation.
That's why I said personal finance is messier than spreadsheets and numbers.
That's why I said personal finance is messier than spreadsheets and numbers.
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