I just developed an interesting wealth exercise which gives insight as to whether you are perpetual money machine....or a squander!!
Here are the steps:
1. Add up the total amount of earning to date. The person I did this on earnt $1.8m over 20 years.
2. Add up the amount of tax paid over the last 20 years worked. The person I did this exercise paid about 620k.
3. Add up your living costs (you will have to estimate)...in my case study it was about 905k.
So based on the above this person has earnt $1.18m NET over 20 years. Their saving after living costs over this period is $375k. But their current networth is less than 300k...INTERESTING...
If this person has a net wealth of $750 to $1.12m (2 to 3 times their NET savings) they are doing very well. Obviously, the ability to make money is driven by savings.
A very interesting exercise indeed. I did this exercise on myself and found it very interesting....
Here are the steps:
1. Add up the total amount of earning to date. The person I did this on earnt $1.8m over 20 years.
2. Add up the amount of tax paid over the last 20 years worked. The person I did this exercise paid about 620k.
3. Add up your living costs (you will have to estimate)...in my case study it was about 905k.
So based on the above this person has earnt $1.18m NET over 20 years. Their saving after living costs over this period is $375k. But their current networth is less than 300k...INTERESTING...
If this person has a net wealth of $750 to $1.12m (2 to 3 times their NET savings) they are doing very well. Obviously, the ability to make money is driven by savings.
A very interesting exercise indeed. I did this exercise on myself and found it very interesting....