The Motley Fool Discussion Boards Previous Page Retirement Discussions / FIRE Wannabees URL:  https://boards.fool.com/using-the-formula-from-the-book-the-millionaire-26249516.aspx Subject:  Re: Am I on track? Date:  1/4/2008  12:31 PM Author:  math999man Number:  4542 of 5260 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 accumulatorA 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 - http://www.travismorien.com/FAQ/thrift/millionaire.htmHow do you compare with the formula given above ? Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us