More specifically, what is the single metric you would use to monitor personal wealth?

  • 2
    Depends on why you care. – user296 Dec 1 '10 at 20:08
  • Whatever you want it to be ;) – Matt Phillips Sep 1 '11 at 10:13

The number of days you could sustain your current lifestyle if you stopped working for money today

  • 2
    +1. This is about the only way to measure wealth which is equally applicable pretty much worldwide and at every stage of life, since it focuses on what you have compared to what you need. – a CVn Aug 29 '11 at 9:36
  • So you can't get any richer than living off dividends and interest? I wonder if people supporting this measure understand its implications for social policy... – jldugger Sep 1 '11 at 5:28
  • @jldugger - You can only get richer when living off of the dividends and interest when the amount coming in exceeds the amount going out. – anonymous Sep 1 '11 at 15:42
  • But once that happens, this metric loses any ability to measure incremental wealth. Essentially Warren Buffet and a well off retiree are going to come out equally 'rich', and I don't think either person agrees with that idea. – jldugger Sep 1 '11 at 15:52
  • 2
    @jidugger - You mean the implication that one need only work enough to sustain his or her desired level of consumption? – Adam Jaskiewicz Sep 2 '11 at 1:29

The metric I prefer is net worth, minus the value of your home, then divide by your annual expenses. The house is subtracted because you need to live somewhere, so its worth isn't part of retirement savings. I divide by expenses to create result that really answers how close one is to being able to retire. The target is to have 25X your required spending gap. Note, as you close in on retirement, and social security is still in place, you can use it in your planning. If I were in my 20s or 30s today, I wouldn't use it in my numbers.

  • Thanks, this is an interesting formula. I've never looked at it from the retirement perspective. – Derrick Nov 28 '10 at 17:19
  • 2
    How about instead of dividing by income, you divide by your annual living expenses? – Greg Jul 22 '11 at 16:56
  • 1
    Greg, I edited to your suggestion. In this case 25x is the goal, adjusted for ss or pension. – JTP - Apologise to Monica Aug 5 '11 at 22:56
  • 1
    Agreed. I think it's key to subtract your primary residence, and not something people usually do. – Adam Jaskiewicz Aug 29 '11 at 12:24

Net worth in local currency.

  • Blatantly obvious and important one for sure. That said, perhaps there is another even more universal measure of wealth. – Derrick Nov 28 '10 at 17:18

The wealthiest man is not the one who has the most, but who needs the least.


Wealth is not what you earn, nor is it what you spend. It's the difference between those two.


StackExchange points, obviously. =)


I think it should be the amount which makes you feel satisfied, strong and brave for the future.

Not the answer you're looking for? Browse other questions tagged or ask your own question.