[pearlieq]

I think their formula is nice as one way to measure wealth, but I think there are some serious flaws, especially for younger folks.

When you are young, your income flucutates and can grow quite rapidly--the formula really doesn't account for that.

For example, say you're 25 and make 100k per year. According to the formula, your net worth should be $250,000 (interesting, since when you were 20 you were probably making 10k a year at a part-time job). However, say in the next year you got a nice raise and your spouse began working. Now you're 26 and your income is 150k. All of the sudden your net worth is supposed to be $390,000.

I don't think even the most prodigious of PAW's could parlay an extra 50k a year in income into another 140k in net worth in just a year in any kind of "normal" context.

I find the formula interesting, but I won't be paying too much attention to it until I hit my late 30's or so.