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How do you compare with the formula given above ?

I know this has been discussed a hundred times before on various boards, but I had to bring it up again. That formula is too simplistic to mean much. For one, such as myself and the OP, who is 32 years old - I would consider it quite prodigious to even have 3.2 times our household income - certainly above average. On the other hand, I hope and pray that by the time I am 60, I have significantly more than 6 times my salary. Otherwise, retirement might look quite bleak.

The authors of the book tried to fit a linear graph to what is an exponential function. It works okay for the middle numbers, but does a terrible job on the ends - those at the beginning of their careers and those at the end. According to the formula, my little sister, who graduated from college last April should have (2.4 * $56,000) since she is 24 and has an annual salary of $56,000. Kind of silly when you think of it that way.

-4


I agree. A better comparison would be to see net worth percentiles by age. And of course the more important measure is to compare yourself to the progress you need to reach your goals.
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