28 May, 2013

 I recently turned 40 & KAPOW! IT HIT ME.

How am I going to retire and how do I stack up against others my age? This led me, like many of us, to Google.

The first thing I ran into was “The Millionaire Next Door” the basic principle to determining net worth has a pretty straightforward calculator:

Age X Annual Pre-Tax Income / 10 = Net Worth.

It’s an eye opener!   Based on this most people I know would not have had time to gather this wealth after paying off college or university loans, starting a family etc. Unless of course they had significant help starting out. I think as the calculation goes along cumulatively in the later years you start catching up but as a 40 year old, not happening.

While searching through many articles on the subject I found a calculator provided by Royal Bank of Canada “How Do You Stack UP? (since then this page has been removed)

This was a great tool to help me look at my income and debts and average it out against other Canadians across Canada and in my Province of BC. I guess we all want to keep up with the Jones’ and this for me gives a pretty clear view of things.

Now another article I looked at was through Workopolis Average Canadian Paycheck.

They stated that based on Statistics Canada 2012 salaries went up by 2.8% to roughly $47,200 from 2011 of $46,000. It also gives a good list of professions and the average wage for each. It’s a good thing to share with families or young people that are looking at education as an expectation for wages.

With my research all I can conclude is that wealth is up to the individual’s current income, future potential income, investments in real estate or savings and the lifestyle they wish to lead now and in later years.  Although for a lot of people wealth can also be measured in non monetary means.

I guess what I figured out for myself looking into my financial crystal ball is live financially modest and without a plan of action and implementing this plan time will be the eventual dictator where and how you live your life.

In the words of Harvey MacKay “If you fail to plan, then you plan to fail”

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