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.
- The Millionaire Next Door by Thomas Stanley
- Stop Acting Rich By Thomas Stanley
- TVL Episode 80: Financial Freedom Milestones
- Website To Check Your Wealth Index by Hugh Chou
- TVL Episode 242: Financial Pros And Cons Of Home Ownership
Listen To Episode 264