How Wealthy are You? - Thomas J. Stanley's Wealth Equation Calculator
I read the very enlightening book The Millionaire Next Door
by Thomas J.
Stanley and William D. Danko years ago,
and they had a very interesting
little calculation to see how you stand in terms of real wealth
relative to your age and income. Stanley later
expanded on this by calling it your "Wealth Equation" and defining an index
called the "Wealth Index" (WX) which is simply your net worth divided by the
expected wealth for your age and income. In his more recent book,
Stop Acting Rich, Stanley analyzes this ratio for many people to see if they are
balance sheet affluent (BA) or income statement affluent
(IA). I have now
expanded this calculation to calculate the index and show which way you
fall.