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I think net worth to annual expenses is indeed a much better figure than NW to annual income. Think about it - getting a raise decreases NW/AI even though it's a strictly better financial position. NW/expenses is what will count in retirement; your former AI won't matter. NW/expenses of 20 directly means that you can be retired for 20 years without running out of money.

I agree! And as you get older, if you continue to live frugally, your NW/expenses ratio will tend to go lower as kids are raised, mortgage is paid off etc.. It may not always be the case for everyone, but it has been that way for DW and I.

Another % that I pay attention to is my investment contribution/gross income. If you are increasing income each year, hopefully, you are increasing your investment contributions as well.

As DW and have seen our expenses go down (2 of 3 kids gone now) and our income go up, we've tried to strike a balance between increasing the investment contributions and having more fun, travel and entertainment.

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