One of my goals for the new year is too continually track my net worth monthly to see how I am making it grow. I am excited to track it and see how much it is growing by saving and investing while spending less. I eventually want to be what Thomas Stanley calls a Prodigious Accumulator of Wealth (PAW) as opposed to an Under Accumulator of Wealth (UAW). The formula for figuring out which one you are is quite simple and involves your age and salary.
According to the formula your average net worth should be = 0.1*age*pre-tax income from last year (this can be taken from your W-2).
The formula is slightly skewed for those of us who are younger and those who have just achieved a stable salary. However, if you want to know how much you should be worth this is a good approximation. If your actual net worth is higher you would be a PAW and if it's lower you would be classified as an UAW.
I just graduated from college last year and have obviously not had much time to accumulate wealth. The power of compound interest is also not on my side but I am feverishly saving and want to get to the $1 million net worth. I am very far off right now as you may be too but if we keep saving and investing the flywheel will turn faster and faster and our goal will be attainable.
--A Future Millionaire
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