Rate yourself: Are you a PAW? A UAW? Or an AAW?

**Greebo** · 08-19-2009, 08:10 PM

What the heck is Greebo talking about now?

Greebo is talking about terms from the book, "The Millionaire Next Door".

AW is "Accumulator of Wealth"
P is "Prodigious"
U is "Underachieving"
A is "Average"

How do you rate yourself?

The authors of the book calculated the average net worths of several thousand millionaires (yes, there are that many in the US - oh and by the way? more than 80% of them are first generation rich), and the average incomes of those same millionaires, and they reached a formula.

Take your age. Divide by ten. Multiply that by your income. That is what your net worth should be, if you want to match the millionaires in their asset to income ratio.

So, if you are 20, and you make $50,000 a year, you should have a net worth of $100,000 to be on par with America's millionaires.

Now - if your total net-worth is within 25% of that number, you are a Prodigious Accumulator of Wealth. So at age 20 making 50k, if you're worth $75,000, you're a PAW.

On the other end, if your net worth is in the bottom 25% - or 1/4 or less of your target ,then you are an Under Achiever of Wealth. A 20 year old earning 50k with a net worth at or below $25,000 is a UAW.

Everyone else is an AAW - an Average Accumulator of Wealth.

How do you determine your net worth?

Add up everything you own of value. Your house's market value. Your car's resale value. Furniture, electronics, 401ks, Roths, investment accounts, boats, real estate, anything you could sell for a price. That is your gross assets. INCOME DOES NOT COUNT.

Now add up everything you OWE - mortgage, car loans, credit cards, college loans, helocs, personal lines of credit, the $500 your granddad lent you. That is your total liabilities.

Take assets - liabilities and you get your net worth.

So divide your net worth by your target, and that's your percentile. 25% or lower, UAW. 75% or higher, PAW.

My name is Greebo. I'm 40 years old. And I'm a UAW (18%). But I'm on the rise.

**dcompton** · 08-19-2009, 08:20 PM

My name is Donna. I'm 61 years old. And I'm a UAW (roughly 22%).

Donna's content because she never wanted to be a millionaire anyway.

**Greebo** · 08-19-2009, 08:28 PM

Originally Posted by dcompton

My name is Donna. I'm 61 years old. And I'm a UAW (roughly 22%).

Donna's content because she never wanted to be a millionaire anyway.

Well the point isn't so much about being a millionaire, because the PAW, AAW and UAW rating is based on YOUR income. If your income is only 20k, it's gonna be dang hard to get to millionaire status no matter how long you live.

The point is to emphasize how much wealth you've accumulated relative to your income. Why? Because, at 40, I've been becoming painfully aware of just how ill prepared we are for the future. If my income vanished tomorrow, we could not maintain our lifestyle for long. We might last ...

... as I write this I realize I looked at the wrong number in Quicken. I'm NOT a UAW anymore. I'm an AAW (31%)...

...anyway we might last, let me see... our cost of living today into our net worth ... 3 years before we went broke. We have the option of reducing our lifestyle, and if we did we could probably make it about 7 years. More than 1/3 of our income is tied up in assets we can't touch for 25 years (retirement accounts), however, so actually it's more like 2 years at this lifestyle and 3-4 years at the cheapest possible.

The number, in other words, is meant to be a wake up call. Not to point out how far we are from being a millionaire, but to point out how far we are from being financially secure at our own income levels.

**dcompton** · 08-19-2009, 08:34 PM

Point taken.

It's growing much faster now and I'm still content anyway. I do as much as I can do, update the balance sheet at the end of the month, and close the books. What happens, happens.

**nuisance26** · 08-19-2009, 08:34 PM

~DH earns the only paycheck around here but all the accounts, assets and debts are in both our names. Using his age and our assets we are PAW.~

**Bournecrazy** · 08-19-2009, 09:08 PM

Originally Posted by Greebo

...

So divide your net worth by your target, and that's your percentile. 25% or lower, UAW. 75% or higher, PAW.

i may have missed it but how do you know what your 'target' is, how do you work that out. or is the target 100,000 im a bit confused. - sorry its late, its like 2am w/ no sleep

**Sassyclass** · 08-19-2009, 09:32 PM

I don't even have to figure the % to answer this. We are definately UAW's. I'm just happy to have enough. Now if for some miracle we do come into tons of money by whatever means, I'll take it and make the lives of some lucky people easier.

Cat

**forHISglory** · 08-19-2009, 09:46 PM

Interesting, Greebo. I guess we are PAW. I am 60 and we just kept socking away like crazy. Nowhere near being a millionaire, though! But I have contentment, and that's worth a lot. And I'm retired, and that's worth a lot!!!!

**MaryCarney** · 08-19-2009, 10:37 PM

I read that book years ago. Really fascinating. It made me realize, for the first time, the difference between 'wealthy' and 'affluent'.

Highly recommend it to you all, as it gives you some good ammunition in talking to people about finances and what you do with your money.

**danni** · 08-19-2009, 11:08 PM

We are AAW(43%). But given the fact that we make less than $30000 we are nowhere near millionaires.

**monkeywrangler71** · 08-19-2009, 11:19 PM

Gross or net income?

**Preston** · 08-20-2009, 02:28 AM

I literally got this book last week and it's the book I am currently reading.. kinda weird to see that question pop up.

UAW if I go with my time working since college due to getting into a financial hellhole..

As it stands now My living expenses are less than 35% of my take home pay (including minimum debt payments) and The further I dig out of the debt the small percentage that becomes.

**Greebo** · 08-20-2009, 04:15 AM

Originally Posted by Bournecrazy

i may have missed it but how do you know what your 'target' is, how do you work that out. or is the target 100,000 im a bit confused. - sorry its late, its like 2am w/ no sleep

Take your age. Divide by ten. Multiply that by your income. That is what your net worth should be, if you want to match the millionaires in their asset to income ratio.