The Quest for Wealth
General money management
Monitor your wealth effectively.
from The Quest for Wealth: 6 Steps for Making Mindful Money Choices by James R. Langabeer
How to Apply This
- Calculate your equity.
Deduct your liabilities from your assets. Use marketable assets such as checking, savings, CD, investment, and retirement accounts. Exclude assets that really can't be sold or are difficult to value. - Calculate your lifetime earnings.
If you’ve paid into Social Security, an easy way to capture this is to log into the SSA.gov website, create an account, and download or add up your salary history. If you can’t, simply estimate what you made each year from the time you started working. Add up that number and multiply it by the number of years you've been working. - Calculate your E:E ratio.
Divide your calculated equity by your lifetime earnings. This will give you your equity-to-earnings ratio, which is useful for evaluating how successful you’ve been in converting your lifetime earnings into wealth. The higher the number, between 0 and 1, the better.
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