How do you measure up?
One of the issues pointed out by FMF in his post on NetworthIQ and others have in emails to us, is that you should be cautious when comparing your net worth. Our users could skew higher and Americans in general are not saving enough. Both are valid arguments. I believe that the comparison feature will be one of the most interesting parts of the site, Americans (and you Canadians) are competitive people and love to know where they rank. Plus, we’re identifying other data sources, such as Census data, to widen the scope and present a better gauge.
It is smart though, to be cautious when comparing yourself relative to others. You should figure out what your goals are in life/retirement and strive to meet them independent of what others are doing. But, as a (relatively) young person, I know how hard it can be to figure out what you’re going to need in 30 years when you want to retire.
To that end, one of the things that we have been thinking about is adding some more objective measures into the fray. JLP’s post on How to determine if you’re wealthy (and part 2) mentions The Millionaire Next Door (a must read) formula. What others are there? Does anybody have some good resources on other objective measures, both on net worth as a whole and for specific amounts/percentages of the net worth components? I’d love to hear about them so that we can try to work them into NetworthIQ.
July 28th, 2005 at 10:37 am
Ryan, there are statistics on typical net worths of different age groups and demographics. I don’t specifically recall where I saw them, but I would check with the Bureau of Labor Statistics and perhaps ask at Google Answers. There are definitely general numbers for what you’re looking for.
July 28th, 2005 at 8:54 pm
Something that you might want to consider is setting a frame of reference for people. If you could decide what number people should shoot for, (say $1 million as an example), and then map it out as to where they should be at each age interval. Obviously you’d have to also show some different interest rates, but it would be a neat feature to be able to see a trend line that correlates to the person’s current net worth. (I’m thinking “planned versus actual” trend lines or something like that)
Hazzard
Everybody Loves Your Money