Quote:
Originally Posted by maat55
The Millionaire Next Door has a formula:
Multiply your annual income by your age and divide by 10.
If you make 50,000 at forty, 50,000 x 40 = 2,000,000.00 divided by 10 = 200,000 is what you should have.
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I like that formula too, but keep in mind, that this is how they define "P.A.W."s in the book (Prodigious Accumulator of Wealth), or wealthy individuals.
Here is more information on that excellent book:
The Millionaire Next Door - Wikipedia, the free encyclopedia
Here is a calculator for that equation, with more info on how you stack up:
http://www.banksite.com/calc/wealth
I'm 25, and according to the equation, I am not a P.A.W.....
YET!
A really cool equation would be to figure out what percentage of your income you would need to save, at what rate-of-return, and for how long... to "catch up" with the Millionaire Next Door P.A.W. equation.
Any takers?