Nords, many people who read the book question the equation. There was a lengthy article on msn criticizing it which appears to be gone (called "How rich should you be" and is cached on google). I've read the book, and the sequel. I like the book for it's portrait of a certain type of millionaire, but it's clear that they have serious problems with their methodology (which I applaud them for actually including in the book). For one thing, if they were my market researchers I'd fire their butts. Who wants to try and sell to wealthy cheapskates? Good luck!
Of course you CAN get to three times your income by the time you're thirty, start out saving 17% of your income when you're 22, add all of your 5% a year raises, and make 7% on your investments, and you are there. But is that a reasonable standard? This person would be extremely unusual. If they continue this they would have about 10 times their income at 40, and 20 times at 50. But, you say, people don't do that. They have kids and so on. I agree, but then you should be consistent and acknowledge that people, even people who are doing quite well, don't have three times their income saved up when they are thirty.
There's an update to scott burns' wealth scoreboard here: http://www.dallasnews.com/s/dws/bus/scottburns/alsoonline/wealth_scoreboard.htm
90k about puts them in the top 10%.
Of course you CAN get to three times your income by the time you're thirty, start out saving 17% of your income when you're 22, add all of your 5% a year raises, and make 7% on your investments, and you are there. But is that a reasonable standard? This person would be extremely unusual. If they continue this they would have about 10 times their income at 40, and 20 times at 50. But, you say, people don't do that. They have kids and so on. I agree, but then you should be consistent and acknowledge that people, even people who are doing quite well, don't have three times their income saved up when they are thirty.
There's an update to scott burns' wealth scoreboard here: http://www.dallasnews.com/s/dws/bus/scottburns/alsoonline/wealth_scoreboard.htm
90k about puts them in the top 10%.