Calculating Individual Total Worth

We know the standard “net worth” equation. Total assets – Total Liabilities = Net worth.

Unfortunately this equation makes no sense at all and should be thrown away since it does not tell you anything about your future. We’ll outline a different way to determine how much you are worth. And. Hopefully, change the way most people think about their value as well. This will either be eye opening in terms of being negative or it could be eye opening in a positive way. You could be richer than you think.

Part 1: Starting Calculation… Years of Life Based On Liquid Value

Lets start from the beginning in terms of what your total assets are. We will have *three* classes of assets and each asset class will then be assigned a new “real” value.

Cash & Cash Equivalents: This is the easiest asset class to understand. All of your cash and all of your liquid assets (within a 48 hour period) are included here. This is on a post tax basis. This means your 401K that is typically included… is now reduced by around 60%. If you wish to include your 401K balance you have to remove all the taxes and also apply a 10% penalty to find the real value. Example: $100K (1-(30% tax + 10% penalty)) = $60K today.

Note: we think the entire 401K balance should not be included but it is fair to include it if one is willing to liquidate it at any time. Just adjust for the tax + penalties. 

Long-term Assets: This is the second asset class where you find the net value of your long-term assets. Typically it will take approximately 1 year to liquidate the entire item. In this case you take the total market value * 80% and remove any closing costs and fees. Example: $1M house  (1-(80% + 3% closing costs)) = $770K.

Note: if you have assets that are even more illiquid add a discount of 5% per year. Generally, we discount by 20% as it will be liquid at that point. An asset priced 20% below value is close to a fire sale and would be sold quickly. Finally, the market value should be determined by 2-3 third party specialists to avoid emotional overstatement of value. 

Liabilities: Every single cent you owe. This is revolving credit (credit cards on a monthly basis), mortgages and any other situation where you owe money (some people could have gambling debt!). So there we have it, our starting point is as follows:

*Liquid Value* = Cash & Equivalents + (Long-term assets * 80%) – Liabilities.

Now the Fun Begins… Years of Life Calculation

Regular people will likely stop there and think the party ends. Unfortunately, that’s simply not good enough because it still doesn’t tell us what your net worth it. All it tells you is how much your *liquid value* is today. That is just the starting point.

Valuing Your Lifestyle: If you’re currently happy, it means your lifestyle goals are met. We are not going to waste time giving our own numbers out. Some people are genuinely happy with minimal amounts of money and others need more.

Here is a quick checklist to determine if you’re actually happy:

1) You are in great health. If your health is in terrible shape, your money is now worth $0. Included in the catch all bucket of health is anyone important to you in your life (can include anyone you wish from family to friends). This means you are living a fun and vibrant life and anyone you care about is also living a similar life.

2) You do not complain about “the system”. A smart person knows how to game a “system” unless they are actually enslaved. The internet has made it possible to find information on every single topic from money to women to correctly playing cricket.

3) You do not care if someone has a Ferrari or a beautiful girlfriend. If you have animosity towards someone who is visibility winning at life, your lifestyle needs are not met because you’re continuing to compare yourself to someone else.  You should not care how a successful person chooses to spend his time and money.

4) You are allowed to have a few off days every year. Life is generally difficult at times and no one is going to be thrilled 24/7/365. We’ll go ahead and say ~24 off days per year. This means a couple days out of the month something goes terribly wrong and you’re upset.

5) You do not need to increase your spending. If you were told to never spend in excess of what you spent last year for the rest of your life (inflation adjusted) you would not be emotionally impacted.

Congratulations if you have checked off the entire list. We can now easily calculate the amount of years of life you’ve accumulated.

Basic Years of Life = *Liquid Value* / Annual Spending to Be Content

Example: Joe has a current Liquid Value of $750K, he is entirely content with his life and spends approximately $50K per year. This leads to 15 years worth of life. Joe is now assigned a value of five.

Life Changing Event Adjustments

Now that we have your value in terms of years of life we can make some final adjustments to determine if this can be increased or decreased. Adjustments are probably the most brutal as they can swing your value up and down by many years.

Legal Marriage: If you are married legally in the United States you are immediately hit with a new adjustment. We will emphasize that this means an official contract with the government. If you have a wife but no contract, this does not apply to you because there is no written contract. If legally married? Deduct 25% from your value.

There is a 50/50 shot that a person gets divorced. No one is special. Billionaires to high school sweethearts all get divorced. Since there is a 50% chance you lose 50% of your assets… Then you lose 25% for nothing. This is a net loss of 25% in terms of actual statistics.

Willingness to Move: In this section we will only include places where you have spent at least 6 months living. This is the bare minimum to decide if you can live in a specific city or not.  If your current cost of living will likely increase or decrease you can make an adjustment to your years of life. If you are likely to move, adjust the calculation for the cost of living.

Cost of Kids: If someone decides to have kids, that will certainly increase their costs. It is not right to raise a child without the opportunity to succeed (unfit to be parents) therefore another adjustment should be made. You simply subtract the expected cost over ~20 years. Deduct ~5 years per child (incremental cost is variable expenses, assumed to be ~25% of your total costs)

All Future One Time Charges: This will largely be a negative adjustment but it needs to be done. We should also subtract an additional ~6 months from the total value. This will account for negative life events (health issues or otherwise).

Official Years of Life = Basic Years of Life +/- all adjustments

Summary (Part 1):  We would note that evaluating your current asset value in terms of “years of life” is NOT a new metric. It is a well known way to calculate one’s net value. In simple terms, as soon as you can obtain a years of life value equal to ~20 years, you’re officially done. The real problem with this equation is it does not encapsulate your current age or your future value as well. With that we’ll go ahead and flip to part two which evaluates the second piece of total value.

Part 2: Current Value.

The second part of the equation begins to encapsulate your current age. In simple terms, having ~20 years of life in stocks/bonds/bank accounts at age 18 is certainly more valuable than age 60. This is also why we don’t include “401K funds” as part of the years of life calculation unless one is attempting to be aggressive. In order to find your future value we have to find the assumed cash flow created by working for yourself. 

Average Annual Cash Flow: Most individuals will view their total income on an annual basis. Some businesses are seasonal and some are relatively stable throughout the year, but an average annual rate will help calculate your future value as well. Once we find your current years of life, we’ll go ahead and add additional cash flow for your future value assuming you are younger. As we’ve stated many times in the past, retirement is simply a myth and should be viewed as an irrelevant goal for most.

Years of Life + ((60 – your age) * (Income in Terms of Annual Expenses/2)))= Current Value

The equation above looks complex but it is relatively simple. While some people will have great genes, if you’ve lived a healthy life you should expect to have large amounts of energy until around 40 then steady declines until 60 followed by material declines until death. Yes this is blunt. Yes it is also true. Typically, professional athletes peak out around 30 and begin to see steady declines… by 60 most people have *some* health issues.

Example: Lets say Joe has 10 years of life saved. In addition, he started his own business and can currently live on the income his business generates. The official value is estimated around 1. Finally, we learn that Joe is 35 years old. His calculation would turn out as follows:

10 + ((25)*(1/2)) = 22.5.

We would wager that someone in Joe’s position is extremely happy in life. If he can increase the income from his business to ~2x his annual living expenses, he’ll accelerate his net worth rapidly. He hasn’t quite made it but the light is at the end of the tunnel. In short, the biggest driver for increasing his current value is increasing his business income because it is *recurring* in nature and drives a multiple which is currently set at 25x.

Once this part of the equation sets in everyone will realize the importance of working for yourself. The longer you’re set earning the majority of your money from someone else… the longer this value stays at ZERO. A zero means you’re relying entirely on savings forcing you to move down the insane path of frugality… eating ketchup soup for dinner and lentils all day.

Summary of (Part 2): The major problem with earning all of your income working for another person is you’re trading a vast amount of freedom for nothing. This does not mean you should “never” work for another person, it means that you have to break out eventually. Maybe you find your biggest interest is in technology and work for Google for ~3-5 years. This likely makes sense as you build the correct skills at a major corporation with money to invest in your future.

Part 3: Benchmarks

Now that we’ve gone through all of the calculations we’ll go ahead and provide some goal posts as well. While a years of life value equal to 20 will always be the standard for financial independence we think it’s not enough. Instead, everyone should attempt to see a steady increase in one’s current value until the age of 60. At that point all of your value is tied to overall years of life.

Before Hitting Thirty: While it is possible to hit financial independence well before thirty, we think every year of full effort should result in more than 1 year of life accumulated. To make the math simple “one should get you two”. A fun business axiom is that a dollar in usually results in a three dollars back. If you follow this rule it is factually impossible to be behind the curve by the time you’ve been working 100% for 10 years in a row. You’re done by this time due to investment returns.

Using the Median: Median income is roughly $50K per year. This is why our original standard is about $1M or ~20 years of life by thirty. At that point you’re unquestionably financially independent unless you’ve picked up a material drug or alcohol problem on the way to reaching this mile stone. Many will find this goal to be lofty and we think that is a good thing. If you’re aiming for a lofty goal and only achieve half of it ~$500K… You’re going to be a millionaire by 37 according to compounding interest assuming the principal remains untouched.

Extremely Well Off: The extremely well off section begins at a three multiple. This means you’re able to spend into perpetuity 3x the median wage. This is an enormous amount of money for most and should be the “gold standard” for an individual. If you’re worth $3M or you have a business generating large amounts of income (and you’re young) you can likely achieve this sometime in your 30s as well.

Concluding Remarks

We have made this post a bit shorter as there are a lot of calculations provided in the post. Below is a quick summary of the ideas provided.

– Years of life is the ideal baseline building block

– Years of life are not equal as your ability to enjoy life begins to deteriorate slightly at 30 and materially in your 40s/50s.

– Once you’ve reached 20 years of living expenses you’re set for life and the goal is to increase your total years of life until you reach age 60

– Income working for yourself is the only income counted towards your total value (the only exception is if you are 1,000% satisfied with your profession, most won’t be as it causes them to lose their freedom)

– Somewhere around $3M and you’re at a gold standard for living and it will be difficult to relate to regular people

Now that you know how to calculate your true net worth, we can recommend Personal Capital as the premier software tool of choice. The Company offers *free* software tools with the following four key features: 1) ability to avoid losing money by tracking all fees associated with an investment product allowing you to choose the best possible fund for your future, 2) portfolio analysis where your risk profile is stacked up against your current age and retirement goals, 3) in addition to these free tools, you can also track your net worth and path to becoming a millionaire and 4) when you hit $100K in networth you’ll receive a free one time consultation with an investment professional at Personal Capital. After linking up all of your accounts you’ll be able to sit back and watch as your net worth goes up and your fees remain minimal over the next several years. We strongly believe that Personal Capital is the premier personal finance software tool when compared to its competitors such as Mint. If you’re looking to avoid personal financial collapse, it makes sense to track everything in one place for *free*.

Comments

  1. ValleyGeek says

    > This does not mean you should “never” work for another person, it means that you have to break out eventually. Maybe you find your biggest interest is in technology and work for Google for ~3-5 years. This likely makes sense as you build the correct skills at a major corporation with money to invest in your future.

    This is my current status waiting for a liquidity event with the company I’m working for. Once that happens I’ll be focusing 100% on my other income streams (currently have 3).

    BTW, great post! I moved to NYC from Miami and already have seen a 2x increase in income. This is while keeping my expenditures the same regardless of the cost of living change (Rent++ while transportation–). It works to live a minimal lifestyle, not buying status and having the proper mindset (Time > Money).

    Thank you WSP!!

    • Wall Street Playboys says

      Congrats, if there is a liquidity event on the horizon it makes sense to stay. Keep the balance for as long as you can (between building outside streams and maintaining performance at the firm).

  2. kaizen says

    Thank you so much for your posts.

    I already feel that I have the first 3 points sorted on the happiness checklist.

    I turned 22 years old last month, work a tech job in enterprise software and am moving to transition into consultancy within the company in the next 6 months (then will figure out how to move into sales from there).

    Outside of work I spent a year solidly focused on picking up girls and learning game. Now I focus on reading books, hitting the gym (cutting down to 10% BF atm) and learning skills in speaking, persuasion (but more networking/making friends as opposed to game now) and photography/film/editing (fun hobby and think high quality production will always be in demand for social media) at the moment.

    Onwards and upwards.

  3. Work says

    (Not asking this question, comment in the form of a question)

    For young guys:

    At 25 would you give up 5 years of your life and sometimes savings working on your “internet based skills” drastically increasing your odds of achieving financial freedom working for yourself?

  4. Ha Johnny Bravo! says

    I remember reading a post from you guys where you said the college you pick, your major, and first job offer are the 3 most important turning points in life. Posting this as someone that messed up on the major and academics part, despite graduating from a decent state flagship (around the prestige level of the University of Florida and UNC Chapel Hill).

    Ever since reading wall street playboys, I’ve realized that I have had some good ideas and habits drilled into my head such as appreciating the opportunity to work for 70-80 hrs a week in your 20s and not falling victim to the crowd. Unfortunately, the more I read the site, the more I realize how at the age of 24, I really fucked up and worry that my life is beyond repair. For one, I went to college with aspirations of being a doctor (since you know, they say medicine is a lucrative profession even though it is not) and ended up in your prototypical biology major pre-med track. Was not cut out for it but ended up finishing the degree with a bad GPA (< 3.0). I would not want to go into medicine even if I could, it is just not the field for me.

    I also wasted a lot of time in college, chasing girls that were not interested in me and getting too caught up in the "college experience" while my hard working peers (the few I knew) were hitting their careers hard. The issue is I hung out with the "there is no life after college" crew and wasted my college years away, only coming out with a degree.

    I went to a state flagship (top 50 in terms of public universities, around the range of a Chapel Hill or Florida in terms of prestige) and graduated but here I am caught in a rough situation.

    Right now, I am the typical post college loser living with parents after college, having a hard time getting into a decent career because of my bad college transcript and lack of building a foundation. It's worse because my parents are practically the "average" people you guys talk so much about on your blog and I am just now waking up to this.

    I feel like I am mentally a different person now ever since reading WSP but at the same time, I feel like it is too late for me. At my age, your typical WSP reader is on Wall Street already being an associate in IB making 150K+ per year.

    It's like I feel that I have the drive and perseverance to put in those 70+ hours a week but I also feel like I am drifting through life at the age of 24 and have absolutely no idea on where to go in terms of a career.

    Wall street and banking = out of the question due to my grades.

    I fear that I might have to go back to college for another degree or do something that will set me years back compared to the guys who majored in engineering or finance and are already on their way to a huge career jump.

    The only thing I wish for now is a path in life that works for someone in my situation so I can finally hit the ground running. I am frustrated now because I have some bits of my youth left at 24 but due to my past mistakes, I cannot put myself in a situation where I am working those long 80 hr work weeks to get a good amount of money.

    While WSP is the best blog on the web for guys in their 20s, I truly do wish that some writers who were in my kind of situation (the one many college grads that have been lied to by society face) would share their experiences and success stories. I am not talking about the motivation aspect of it (as we all know motivation is a load of shit), I am talking about the aspect of it that involves realistic and rewarding paths. We all know IB and Mgmt Consulting is out of the question for good but there must be other ways guys who missed the 3 turns (school, major, and job offer) can make up for lost ground even though they will be playing catch up in a huge way compared to their Ivy league friends who made all 3 turns right.

    • Wall Street Playboys says

      You need to get into online sales ASAP. If it makes more than Wall Street (hint hint hint) it’s the easiest way to create your own luck.

      Success stories and “I used to be just like you” is how you’re going to get scammed and thrown to the hyenas.

      Read 5 books on copywriting
      Read 5 books on website design
      Sell a product you know better than most

      Build the website. All you have to do is sell $400 a day. You can make 25% margin at minimum that’s $100 a day in less than 1 year you’re covering living expenses.

      We have already covered your “problem” a billion times here. We started our company while WORKING 70 hours a week. That’s a better proof point than anything.

      Two posts:
      Money Making Machine
      And $1M 10 years zero excuses

      • Ha Johnny Bravo! says

        I respect and admire quick replies, you guys really do care about your readers, thank you!

        To help cope with this feeling of failure that comes from having no career path in mind, I have been doing some training for a lab tech position in a small city that should pay me 40k/yr salary. Not a lot of money but I am thinking that if I can somehow find a way to get out of my parents’ house, then it will mean so much to me because their mindsets might just wear on my (average of 5 people you know rule). I am also spending every day on CodeAcademy in order to learn coding since I hear it is going to be an in-demand skill. Building some skills in order to make myself more employable in the future pretty much.

        I am also applying to some sales jobs through the university alumni groups and going to career fairs in order to try and land something to just get me out of my parents’ house. So far I have not gotten a call back but I did get one interview, still haven’t heard from them after a week or so.

        As much as I want to eventually start a business and go that route, I feel like I really need to build up some skills and get in a workplace (like you mentioned with the google example in this post) to where I have built the kind of foundation for myself to eventually lead to better skills in terms of eventually starting my own business.

        I know I sound kinda bad saying this, but I do want to get my hands dirty with a career and work those 70 hrs a week for a few years to accomplish independence from parents and start earning cash for myself. This right here is the main issue I am having with my life, just finding a career path or a career (not a minimum wage job) to get me out of my situation right now. Drama at home (“why can’t you be a doctor!?”) is pretty bad and I need to escape that situation and earn financial independence fast!

        WSP, I apologize in advance if I am coming off as annoying or whiny, it’s a rough situation for me right now in life and I already see the game clock ticking as my friends get ahead and move into big cities working their jobs.

        Most college kids would dread this idea but man I cannot wait to get my hands on a career so I can literally pound the life out of it and work those 70-80 hrs a week. Fuck wasting life away getting drunk and partying, what the hell was I thinking! Thank you for the online sales idea, will be doing my research on that immediately!!!!

      • sumyungguy says

        This was your most concise answer and I still learned more despite you having answered very similar questions to this. I probably liked it because it hits close to home.

        I dodged college because I knew I would end up like JohnnyBravo. Instead I have a business and speak 3 languages, and I spent some time living with family at 20 when I was broke and even now I cover expenses saving little.

        I also stress a bit about not being “on track” but that kind of thinking is ultimately a distraction.

        My score 0.5 + ((39) * (1/2)))= 20

        As you might predict I’m fairly happy with my life, and I know my best years are just around the corner.

      • Anonymous says

        This is a great post, and bookmarked for later reference.

        I AM surprised however at the 10 book precursor to your recommendation. I thought in the past you would’ve recommended 1 book on each topic and to get started (maybe even just 1 on copywriting and none on web design).

    • silicon valley dude says

      One piece of advice: avoid Codecademy. Nobody who knows anything about coding or computer science uses that shit.

      What I’d recommend instead if you’re a social person at all: reach out to those compsci degree “nerds” and offer to trade your networking/social skills with them for their advice on how to best learn how to program. Better yet, get yourself working on real projects with them.

      I’m certainly far behind your average WSP reader, but I did graduate from a top 5 CS uni and have an “elite” job in silicon valley, so this is probably the one thing I can give advice on.

      Best of luck.

      • Bravo says

        Whoa! SHIT DUDE. I’ve been using Code Academy for the past 2 months in order to learn Python as a coding language. At times it has been somewhat difficult but I used it to get my feet wet. Before I reach out to my friends, I want to offer some value and at least know what I am talking about. Do you have any idea on how I can better prepare myself to be a decent coder? I have been spending a good bit of time on Code Academy to get an idea of things so any alternative would be appreciated.

      • Anonymouse says

        Avoid learning anything more than the basics of coding. It takes a very analytical mind to get into the top 10% of programmers and the commenter who’s question you answered doesn’t match that sort of personality based on his college story.

        Instead, I’d recommend getting familiar with WordPress, Magenta and the like. Becoming relatively proficient with these frameworks can be done in a couple of weeks and will allow him to start selling a product immediately.

        He can start by finding local dentists, lawyers, clinics, etc. that don’t have a website or have a shitty website and offer to improve it. The key things necessary to persuade them is to show the competitors’ websites compared to their own and to explain the cost of the website in terms of how many customers the website would have to convert in order to break even.

        If you offer to make a website for a lawyer for $4000 and his average client pays $700 for his services, it’s easy to see that the website is making him money after only 6 clients. If you underestimate the average earnings per customer on purpose, many clients will be quick to correct you and basically help you sell the package.

        Any technical work can be outsourced, but must be factored into the cost. Always buy the “developer version” of WordPress themes that allow you to use the theme on unlimited sites and bill the client for the full cost every time you use it.

        Make sure that any contract you sign clearly states that you own all parts of the product until you have been paid in full and of course make sure that the number of revisions allowed is clearly stated.

    • Bob says

      Bro I’ve seen your numerous posts on WSO where you were whining about the exact same thing MONTHS ago. Point is you can take all the advice in the world and you’re not going to get anywhere because you keep crying about your situation. You should be so glad that WSP gave you the time of day to actually respond.

      • Bravo says

        I’ve read some posts similar to mines on the comments section of this blog and though I do not want to get into this debate, I will say that I have tried to take serious action (learning coding in this case) to at least better my situation in some way…..

    • Anonymous says

      24 is young. Wouldn’t trust 24 yr old heart surgeon so quit bitching.

      You Americans think that if you don’t become a millionaire > 25 you’re toast. Whilst it may detriment your lifestyle to not have $millions, it certainly doesn’t stop you building & investing.

      Living with mom and dad whist investing into a strong foundation is nothing to be ashamed of. The only thing to be ashamed of is not making the most use of your time, which in many cases, living with parents would be.

      I tell you now that staying with parents whilst building independent cash flow > working “for” a moron. Just ignore “reality” and get shit done. You’d be surprised what you’d achieve if you quit complaining & put something into the world.

  5. Ha Johnny Bravo! says

    Sumyungguy: I would not dismiss college so readily.

    My mistake was picking an unemployable major, had I picked finance or engineering instead of giving into my family’s wishes of being a doctor, I would have been much better off for it. If I could do it differently, I would have majored in finance, worked hard for a 3.5+, and tried to get into banking.

    • AC says

      What’s done is done, at least learn an online skill that you fancy and get a job, jeez… it’s not rocket science.

      And remember as WSP said:

      “Success stories and “I used to be just like you” is how you’re going to get scammed and thrown to the hyenas.”

      • Recent graduate says

        Agree with AC. What is done is done….

        On that note. Read WSP’s posts again, but this time, from a different perspective.

        Instead of looking for the “what”, understand the “how” & “why” WSP did things the way they did.

        For example, read 5 books on copywriting, 5 books on web design, sell any product you know works.

        This will take exactly about 2 weeks…very easy. Review the books or watch YouTube how to videos if you get stuck.

        In this example, the “what” means you do online sales.

        The “how” & “why” means you are never comfortable doing something you have never done before and your brain is popping up excuses left and right to stop you from trying something new. But that’s ok because you can buy a book in 20 seconds nowadays as well as find a how to video to guide you in the early beginnings. Keep doing it until you’re comfortable then you’ll realize nothing is as hard as you think.

    • Anon says

      As I understand it: the income you receive in a year after expenses (your remaining cash or free cash flow) that is not from a source which isn’t yourself (hourly salary won’t count, dividends, rental and own business does).

      Except they make the note that if you really love your profession (or a student or a very beginner transitioning from career to business), you can just use your free cash flow that comes from your source which is not yourself.

      It’s just a simple: how much money do I have left in a month divided by my expenses. Once you go over that you’re doing great!

    • BTS says

      annual income
      ______________
      annual expenses

      if you earn 100.000 USD and spend 50.000 USD = 2
      if you earn 2x what you spend = 2

  6. C in AI says

    Hi, I only wish I came by your website earlier so I didn’t have to suffer through the feeling of going crazy. The disassociation from normal life is real. I constantly have to check with my five closest friends who knows my secret to see if what I am doing is normal. The reason why I know you guys speak the truth? I went through everything that you described in the blog post about net worth stages .

    Event though I did not have your blog’s guidance when I was 23 and starting out, I somehow more or less managed to walk the general path presented by you guys. 3 year burn at the beginning (crossed the line, didn’t know better), working while developing side income. Exit 1, Exit 2, waiting for Exit 3 at the moment. Main skill is based on Synthesis with Engineering as university training. AI specialty.

    I am still reading the rest of the blog right now, so far, the impression I get is that this is geared more towards 0 to 1~2 million. Is it possible to talk more about after 1 mil? I think 1mil to 20 mil would be an interesting discourse as 20mil is the meaning of 1 mil when the term was coined.

    I am currently shutting down all my income streams and just taking the exit to consolidate my attention and am pondering what to do next. Already working on things I neglected in the hustle. Health and game, but almost got them to where I am comfortable enough to start thinking about the next stage.

    Thanks for everything
    C

  7. RE Guy says

    Some key points:

    If you’re not making enough to cover 2X living + entertainment expenses for a year (after taxes), then you either need to find a way to make more money (best option) or learn to optimize on less (worse option).

    Complaining about “the system” means you have a rudimentary understanding of it. Manipulating the system to suit your needs means you have an advanced understanding of it. Most people don’t see how big a gap of knowledge, experience and willpower separates the two. Also, ironically, being willfully ignorant of the system but simply grinding it out probably gets you better results than knowing about it and being paralyzed/discouraged (think “middle management” vs. perpetual entry-level).

    If you care about who someone else is dating or what they are doing (lifestyle-wise), then you’re not meeting your own needs. Either reassess (has the media/other people convinced me I need a Ferrari, when Uber suits me perfectly fine?) or learn and hustle to have your own needs met.

    Marriage = legal contract with the government. Not an agreement with your spouse, but a way for the government to intercede on either of your behalves (more than likely, the woman’s) to compel the other in some way. Drilling this into young guy’s heads is a civil service. Also, who accepts any contract at face value? Who doesn’t negotiate terms? That’s all a prenup is, a refusal to except the boilerplate agreement.

    Finally, money (and financial security) is much more valuable when you are younger vs. older. And. Once you reach a level of affluence where you can lead a lifestyle that you love, reaching an additional level stops having value in and of itself (now if you’re making money its for the challenge/fun or some other purpose, not just money for money’s sake). This point was lost on some when a while ago WSP asked about 2M at 30 or 20M at 60 (paraphrased). The too clever by half answer was “2M at 30 so then I could hustle and make more than 20M at 60”, because if you had all your financial needs met then why would you bother simply accumulating to accumulate? Is that the only worthwhile use of your time? But most won’t understand until they get there. Don’t take my word for it though, read “How to get rich” by Felix Denis as recommended on this blog, he states if he could do it all over again (65 with 500M net worth), he’d work like hell to make it to 10-20-30M by 35, then write poetry for the rest of his life.

  8. pokersensei says

    $3mm target net worth seems low to me, at least if you are living in an expensive city like New York. If you assume $150k income off that, after taxes it is going to be more like $100k and that is not enough to live exceptionally well in Manhattan even without having a family. A good one bedroom apartment in the best parts of the city is now running around $5k/month alone.

    $3mm is probably quite enough in a most places, but for the most expensive international cities, I think $5mm-$7mm is the minimum to feel comfortable and live off passive income.

  9. Natural Gas Analyst - Houston says

    I know this may be an asshat question to ask and i briefly scoured the FAQ and about section of the site but i wasn’t able to ascertain an email to reach out to you gents. There was the ‘admin@wallstreetplayboys.com’ or whatever posted somewhere but I got an outlook notification that stated it was inactive?

    Trying to reach out here soon for the guest post so any help here would be appreciated! Let me know a solid email to reach out to you at.

    On another note, solid article as always! The amount of ignorance that exists on the personal finance front is hopeless. And people want to turn around and blame wall street, the government, anyone but the man in the mirror for being broke or having no net worth… Losers! Meanwhile a buddy of mine working in consulting at a big 4 has 100k net worth at 23… No excuses.

  10. says

    @Natural Gas Analyst – Houston

    Working in O&G IB.

    Haven’t found too many like-minded guys down here in Houston.

    Let me know if you want to meet up.

    Know I can’t post my E-mail in comments so WSP can either help us connect or you can hit me on Twitter.

    • Natural Gas Analyst - Houston says

      Sounds good to me brother, I work in phys natty gas trading but def down to meet

      PS stay tuned.. my guest post will be up sometime soon

      • Anonymous says

        I’m a petroleum engineer, am I allowed to give my resume to you guys?

        Stuck in sales until oil comes back.

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