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Author: math999man Big red star, 1000 posts Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5082  
Subject: Re: Am I on track? Date: 1/4/2008 12:31 PM
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Using the formula from the book - The Millionaire Next Door" where it is give by:

The authors developed a formula for the amount of wealth a financially successful person accumulates as a function of their age and income. They had a complicated regression model, but it summarises nicely into:

Multiply your age by your gross annual income from all sources except inheritances. Divide this by ten. This, less any inherited wealth is what your net worth (excluding home equity) should be.

The authors went on to classify two extremes of wealth accumulator

A prodigious accumulator of wealth (called a PAW throughout the book) has a net worth twice as high as this formula.
An under accumulator of wealth (UAW) has a net worth under half of this. In between is the AAW (average accumulator of wealth), which is your ordinary garden variety rich guy.

Reference -

How do you compare with the formula given above ?
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