Message Font: Serif | Sans-Serif
 
No. of Recommendations: 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.

I agree with MadCapitalist, and dissagree with MadCapitalist, and then I agree with him again. I agree with his agreement. I dissagree with the percentile statement as it is irrelevant to the question*. I fully agree with his statement that you should measure yourself to your goals.

*I dissagree because the question asked was "am I on the right track." Comparing yourself to others is meaningless. Comparing yourself to the "general population" is even more meaningless. I intentionally do not compare myself to others (though, I do look at dispersion statistics and am pleased that I am always in the top category... however, being in the top category has no effect on my ability to achieve FIRE). It may make you feel good about your progress (and you should) but you shouldn't feel good because you are "better" than someone else with different goals/priorities.

The Millionaire Next Door formulas are silly. I am 33. I have a NW equal to about 3.8 times my annual income. Much more important to me is my NW relative to my annual expenses (approx 11 times my approximate 2007 actual expenses). FIRE is all about the ratio of Net Worth to Expenses. If the ratio is right (open to much debate, I use 33x since I plan to pull the plug young but think 25X is probably adequate and use it when feeling optimistic).

I think watching your expenses is much, much more important than comparing your income to your savings if FIRE is your #1 goal. A dollar of annual savings is worth between $25-$33 of annual income to me when calculating withdrawal rates.

Good Luck, stick around (and check out the Retire Early CampFIRE too -just be prepared to sift through a lot of off-topic but, IMO, worthwhile, off-topic stuff).

FoolNBlue (Would rather compare himself to you guys... hum, poll idea???) Oh yeah, I almost forgot, vote for this guy: www.ronpaul2008.com
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.