Expected
Net Worth
Are
you on track to be a Balance Sheet Accumulator of Wealth? To determine if you are, here are three
simple levels Gold, Silver, or Bronze based upon your age and income.
Simply
use our multiplier based upon your age times your three years average income.
These
dollar amounts do NOT include housing values.
Example: $50,000 average income and you are 40 years
of age. The Bronze level is 10% (.10) x
40 x $50,000 = $200,000
Bronze
Level [10%(.10) x Age] x Avg. Income = Expected Net Worth.
Silver
Level [20%(.20) x Age] x Avg. Income = Expected Net Worth.
Gold
Level [30%(.30) x Age] x Avg. Income
= Expected Net Worth.
Using
our example of a 40 year old with an average income of $50,000 if he or she
equals or exceeds $200,000 you would be comfortable in relationship to your
income. At the Silver Level this would
equate to being Affluent $400,000 and the Gold Wealthy $600,000.
At
the Bronze Level you will be comfortable plus Social Security in your old
age. You are on track to be way ahead of
the average saver (which is almost saving nothing).
At
the Silver Level Social Security is simply an add on to your income during your
old age. At this level your wealth is
enough to displace the need for Social Security.
At
the Gold Level early retirement (if you so desire) possibly in your early to mid
50's, this would depend upon your average level of income.
The
age old adage is so true; live below your means save and most importantly
invest the difference. Stay away from personal debt, purchase a house at or
less than 2.0 times your income (or the equivalent in monthly rent) purchase modest
used car(s) for cash and you are on your way to financial freedom.
DYI
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