The Voluntary Life: 264 Thomas Stanley's Wealth Index

3 October 2016

264 Thomas Stanley's Wealth Index


Financial independence is one of the core topics of The Voluntary Life. I've heard from listeners at all stages of the journey to FI— just beginning,  already achieved FI, and all the steps in-between. In a previous episode, I explained the milestones along the journey to FI, to help judge how far you have progressed if you are working towards this goal. In this week's episode, I share another tool for judging your progress.

In his book Stop Acting Rich, author Thomas Stanley explained a way to calculate your relative net worth, taking into account both your age and your income. He used this calculation to create a wealth index, which you can use to judge whether you are on the path to FI, or whether you are burning more of your income than you should.

In the episode I explain how the wealth index is calculated and provide commentary on how to use it. There is also a free website that does the calculation for you.

Show Notes:



Listen To Episode 264


2 comments:

  1. That was a bit depressing to look at my numbers. I'm a definite "under achiever." Of course, I'm a late bloomer in a lot of things. I also took a five year self funded sabbatical after leaving an engineering job I really didn't like. Took those five years to enjoy with my family and learn programming. In less than 2 years I'm making more than I did as an engineer but still have a lot of catching up to do!

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    1. Having used your past income to buy 5 years of time with your family sounds a lot more fun and fulfilling than what most people spend their money on :) It can be a bit of a harsh reality check to look at the numbers, but knowledge is power. Kudos for having the guts to think about it.

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