Posted on November 12, 2008 23:47 by
Sam Li
This post is a long time overdue. So how much do you worth and how much you should be. Here is the formula from”The Millionaire Next Door” book of Thomas Stanley and William Danko. I will publish a review on the book separately but to me it’s a must read book if you are planning to become financially independent some day. Also I will explain how they came up with this formula.
Age – A
Gross annual household income – I
A x I /10 = your net worth should be
So let’s plug in some numbers:
Age – 30
Gross annual household income – $90,000
30 x $90,000 / 10 = $270,000
Your net worth should be $270,000 if you are age of 30 and your gross annual household income is $90,000.
So what do you say? How are you doing? You don’t know what is your net worth? It’s a time to take a closer look at your financial situation. Here is I putted together something for you. This is free Excel (2007 version) file you can use it with no limitations and fear - Household Budget v1.00, tools for budget
I have to share with you that I don’t worth as much as I should be, but I’m doing something about it and I’m determined to become financially independent. I developed an exercise, when I’m tired and feeling like my life is passing by, to motivate myself I take our gross household income and multiply by 5. Try to do the same. Did you get the number? Quite sobering isn’t it? Where all this money gone? I know there are 1001 excuses why we are not wealthy. But the bottom line is the financial rescue of your family and yourself in your hands. So suck it up we have mission to accomplish!
Are you close to the net worth you should be?