So, this last weekend, for fun, I added up all the income I’ve earned in my entire life. Yeah, you heard me: fun. It’s pretty easy if you have copies of all your tax returns. If you don’t have your old tax returns, you can use your Social Security benefits statement.* Just sum up all your earnings, interest and dividends, and estimated allowance received as a child. Every dollar that has passed through your hands? Sum it up.
It’s sobering to see how much money has passed through your hands over your lifetime. Where did it all go?
Then, since I’m a baller, I compared my lifetime earnings to my current net worth. It’s easy to calculate your net worth – just add up all your assets and subtract from the your total liabilities. Now you know how many dollars you’ve managed to convert into wealth. Are you impressed? Depressed? Somewhere in between?
Now you can calculate what percentage of your income you’ve transmogrified into wealth. Take your net worth and divide it by your total lifetime income. Is your percentage positive or negative? Is the number big enough for you, or would you like it to be bigger?
How are you doing at converting income into wealth? Only you can answer.
* As a cost saving measure, they no longer send these out. This is too bad, since, when I checked my statement, there was an error on every year. Every year. Most were minor, but still. Yeesh.