re: What % of your income should your mortgage be?

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Are you an UAW or a PUAW?

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I thought saving about 20% of my income would classify me as a "Prodigious Accumulator of Wealth" even if I didn't count the equity in my home, but his formula makes absolutely no sense for people my age because we lack the advantage of compounding intrest that people 40 or 50 years old have.

The formula he uses for the cutoff is: (Number of years of age * annual income)*10%

A 24 year old teacher 2 years out of undergrad earning $30,000 per year should not expect to be worth $72,000 for years without help. That's not really a fair expectation under normal circumstances.

My parents are in their 60s. They've actually never had the "money" discussion with myself or my brother. I have no idea what their income is or what they have saved or any clue about their weath or if I should worry about my father's prospects for retirement from his small business(s). Wouldn't shock me if they were classified as PAW by that same formula, having benefited from decades of capital gains, business income, tax shelters, real estate appreciation, and compounded interest.

A 24 year old isn't going likely to own commercial real estate or a significant source of "unearned" income like people my parents age probably have. If they do, they haven't been around long enough to accmulate much of it. I'd consider it a major accomplishment if that teacher had accumulated $30,000....but she'd still be considered a UAW.

That's really the only critisism I have about the book.

At least it serves to highlight the importance of putting money away when you are young.

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My biggest complaint with most of my friends. We are all mostly mid 30's, some of them have 0 savings. I mean nothing. And I'd say they average 100k/yr as a couple.

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So stupid. I enjoy the debt-free, live under my means life.

So glad I got my wife (before marriage)off the "well, I'm used to having a car payment. I'll be fine always having one" deal. She now enjoys this way of living because before we were together it was paycheck-to-paycheck.

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So glad I got my wife (before marriage)off the "well, I'm used to having a car payment I'll be fine always have one

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Car notes aren't necessarily a bad thing in every circumstance. I could have paid cash for a Honda we bought in March....but I decided to borrow at 0.9% rather than pull money out of savings that have been earning about 13% lately. My gamble can be wrong if the market takes a nose dive though....I still put down about 40% of the value of the car, which is more than I probably should have.

Otherwise I agree. I hate having car notes. I have a 6 year old high mileage domestic pickup truck and a new Accord that I hope we won't outgrow. I buy with the expectation that we'll put 150,000 or more miles on cars before even considering replacement...which for us is about 7 or 8 years. I can probably get 200,000 out of the Silverado before a major overhaul and maybe even more out of the Honda.

I hate buying furniture, but I take the same stance on it. I avoid buying it, but if I can borrow at 0% and keep my savings.....I'll do it in a heartbeat.