So What’s Your Net Worth?

These people cannot be millionaires! They don’t look like millionaires, they don’t dress like millionaires, they don’t eat like millionaires, they don’t act like millionaires – they don’t even have millionaire names. Where are the millionaires who look like millionaires?

I am currently reading this book by Thomas Stanley and William Danko.

This book mainly started as they had discovered something odd about who the real wealthy people are. They were initially set to know how people become wealthy so they basically started out with the most obvious thing to do: they visited and conducted survey in the so called posh and upscale neighbourhoods across the country but interestingly, they got the most shocking discovery of their lives.

People living in these upscale neighbourhoods and driving luxury cars do not have much wealth while many of the people who have lot of wealth do not even live in this neighbourhoods!

They have discovered that most of the millionaires do not look like millionaires at all and are living below their means while those people who are just above broke (JOB) are usually the ones who are spending more than what they can afford.

I have not gone far just yet but the book is an easy read so far. I also encountered something interesting that a lot of you might be interested to know. And it is knowing your supposed net worth given your monthly income and age.

You can get what your net worth should be using this formula:

And using the answer from this, you can now then identify if you are a PAW (Prodigious Accumulator of Wealth) or a UAW (Under Accumulator of Wealth).

PAW = you are immediately classified here if you have a net worth more than twice of your supposed net worth.

UAW = you are considered as this if you have a net worth less than half of your supposed net worth.

You may ask, what if I only have a net worth almost the same as my supposed net worth?

Then you are just an AAW (Average Accumulator of Wealth)

Basically, what the book says so far is that being wealthy is relative. We have this twisted perception that if a person has already a million as his net worth, then he is already considered to be wealthy. But that is not always the case. A millionaire can still be considered not wealthy. We should remember that having a million could not be used as a direct determinant of being wealthy.

So, what are you? =)