Poll

NW as % of the total money you’ve earned after taxes in your lifetime?

<10%
3 (7.9%)
11-20%
0 (0%)
21-30%
8 (21.1%)
31-40%
5 (13.2%)
41-50%
1 (2.6%)
51-60%
2 (5.3%)
61-70%
4 (10.5%)
71-80%
5 (13.2%)
81-90%
0 (0%)
91-100%
4 (10.5%)
>100%
6 (15.8%)

Total Members Voted: 37

Voting closed: March 04, 2015, 01:10:53 PM

Author Topic: Poll: NW as % of the total money you’ve earned after taxes in your lifetime  (Read 4096 times)

ilovetofu

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The latest MMM blog post on calculating net worth had me wondering:

Quote
Very Rough Guideline: Take the total money you’ve earned after taxes in your lifetime (suppose that for Joe it happens to be $1,243,100). If you don’t have at least 40% of it still around to show for it today, you are spending way too much.

What does this represent for you? I'm currently at 80% after taxes (it's 60% before taxes), and I don't consider myself a full blown Mustachian yet.

If you're at over 100%, please feel free to share your story in a comment below.

thebeachbum

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Just so that i understand.

I have worked 3 years $35000+$35000+$40000= $110000

My wife has worked 2.5 years $38000+$39000+(.5*$40000)=$97000

So combined: $110000+$97000=$207000

Our Net Worth is Roughly = $125000

So $125000/$207000= 60.4%

Is that correct?

JLee

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Quote
If you don’t have at least 40% of it still around to show for it today, you are spending way too much.

That's pretty absurd wording for people just getting into MMM. Semantics, but still.

johnny847

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I've got 92%, but that's mostly because my parents gave me a substantial gift right before I started grad school. I've been saving over 50% of my net income since then.

Mrs. PoP

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I don't know about after taxes, but on a gross basis (before taxes are taken out), we're at about 76% today.  We did this exercise from Your Money Or Your Life about a year ago (http://www.plantingourpennies.com/your-money-or-your-life-making-peace/) and it was pretty neat to graph the Total Earned/Total Kept ratio over the course of our adult lives. 


skyrefuge

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109%!

I've noted my net worth has been nearing my total gross income lately, but never considered the comparison on an after-tax basis. When I calculate it that way, apparently I've already broken the 100% level (at least a current stock prices). Woo hoo!

This was achieved with a fairly steady 75% (post-tax) savings rate over a working career from 1999 to today, and a 9% personal rate of return (IRR) over that period.

waltworks

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We're over 100%. I have a hard time imagining we will ever dip below that, actually. Combo of very low spending, some luck with real estate, and never making big incomes, and there you have it.

-W

neil

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I answered the way you intended but I guess I feel weird about thinking of it this way.  I know most of my personal effort goes into W-2 earning and my assets grow mostly unattended, but I feel like I am the manager for those employees and the positive return is part of my "income".  I don't want to waste that money any more than I want to waste my paycheck.

In a retirement devoid of earning, inflation would also degrade the meaning of the number.  Having a percentage of 100% thirty years into retirement would probably be a bad thing.  But I understand that it feels good thinking that you have "kept" every penny you earned when you hit 100%.


I even wanted to include things like my scholarships as "income" in my spreadsheets when I initially built them, but I have misplaced the information over the years.

rpr

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I even wanted to include things like my scholarships as "income" in my spreadsheets when I initially built them, but I have misplaced the information over the years.
I included graduate assistantships (both teaching and research) but excluded the tuition waivers as those amounts were never received by me and/or paid by me. It also never showed up in any of the W2s either. The only place was on the tuition bill. There was a charge for in-state tuition and another credit for the same amount. I did include all other fellowship income both in grad school and post doc.

One other thing that the authors of "Your Money or Your Life" also included were any gifts that you received. Those were to be considered as income to you.

johnny847

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I even wanted to include things like my scholarships as "income" in my spreadsheets when I initially built them, but I have misplaced the information over the years.
I included graduate assistantships (both teaching and research) but excluded the tuition waivers as those amounts were never received by me and/or paid by me. It also never showed up in any of the W2s either. The only place was on the tuition bill. There was a charge for in-state tuition and another credit for the same amount.
Same here

ToeInTheWater

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i'm in our mid-50s

before tax:  38%
after tax: 44%

and i would not consider us all that mustachian.

b

 

Wow, a phone plan for fifteen bucks!