Hard to calculate with all net worth now merged with spouse. Will need a lot of data to calculate this information.
The millionaire next door calculations are easier.
https://www.hughcalc.org/wealth.cgi
Thanks for sharing. This calculator while helpful doesn't seem to reflect changes in income. As it only takes into account your current pay, if you have had big jumps in pay, it will show that you are undersaving.
At the time of vesting since that is your true active income, value at the tine of allocation is meaningless apart from being a number on your offer letter.
Wouldn't that cancel out that net worth portion via RSUs to a large extent? Or are we saying that the growth post vesting is the true addition to our net worth? Just trying to understand so that I can get the right calculation
Yes, growth post vesting is your true addition to net-worth. You could have chosen to cash out completely on vest and spend it all, or invest in Nifty, do whatever, but you chose to stay invested.
It was an active decision on your part just like you would choose to invest in FD or MF.
Mentally, I always account for RSUs as a salary income which the company chose to give me in terms of stocks. Or you can say company gave me cash and I bought those stocks. Makes it easier to account for them and not treat them differently from regular salary/bonus.
Btw, how long have you been working. My ratio is 1.06 currently, but it only became > 1 last March.
Time seems to be a big factor here for long term investors.
I used post tax income since that is what I recieved in hand.
Have been maintaining an Excel ever since I started working,, tracking my monthly income from in-hand Salary, PF contributions (both mine and employer), Income tax refund (since this is still cash in your hand which should have been recieved as part of salary).
This also helps me in tracking my high level expenses month-on-month.
I've seen some sources use the pre-tax income, but I don't see how that makes sense. It's not like the tax you pay reflects on your net worth in any way.
I have been working for 17 years now!!!
and my NW/Earnings ratio is 0.91
Earnings includes, Salary + Vested RSU
Networth includes, current value of EPF + PPF + all Stocks + all MFs + FDs
If i include my EPF contributions to earnings then ratio is 0.87 and if i include employer's contribution as well then it comes to 0.83
I have been working for 17 years now!!!
and my NW/Earnings ratio is 0.91
Earnings includes, Salary + Vested RSU
Networth includes, current value of EPF + PPF + all Stocks + all MFs + FDs
If i include my EPF contributions to earnings then ratio becomes 0.87 and if i include employer's contribution and my contribution then it comes to 0.83
Thanks for sharing as it seems like an interesting concept. Would be worth doing this backdated analysis ... however don't think it has any impact in the FIRE journey though (well we are already FIREd so a bit too late for that anyways ;-) )
That's true, it's probably most helpful for someone working towards FIRE who wants to course correct, either on how much they are saving or whether compounding is really working for them. Still, it would be good to get estimates on this ratio from FIREd people such as yourself for benchmarking!
Hard to calculate with all net worth now merged with spouse. Will need a lot of data to calculate this information. The millionaire next door calculations are easier. https://www.hughcalc.org/wealth.cgi
Thanks for sharing. This calculator while helpful doesn't seem to reflect changes in income. As it only takes into account your current pay, if you have had big jumps in pay, it will show that you are undersaving.
Big jump in pay is exception than normal but sure I agree.
1.2
Nice! How long have you been working? And how close are you to FIRE?
Fired already
1.14 and 1.4 if I include house(self funded)
A self funded house definitely counts. How long have you been working? And how close are you to FIRE?
0.3, income is without deducting tax
0.9
0.31 in-hand salary taken into calculation. Working for 7 yrs now.
1.3 taking into account for pretax salary. Working for 9 years.
My number seems close to 1.5, RSUs are tricky - do we count value at the time of vesting or at the time or allocation?
At the time of vesting since that is your true active income, value at the tine of allocation is meaningless apart from being a number on your offer letter.
Wouldn't that cancel out that net worth portion via RSUs to a large extent? Or are we saying that the growth post vesting is the true addition to our net worth? Just trying to understand so that I can get the right calculation
Yes, growth post vesting is your true addition to net-worth. You could have chosen to cash out completely on vest and spend it all, or invest in Nifty, do whatever, but you chose to stay invested. It was an active decision on your part just like you would choose to invest in FD or MF. Mentally, I always account for RSUs as a salary income which the company chose to give me in terms of stocks. Or you can say company gave me cash and I bought those stocks. Makes it easier to account for them and not treat them differently from regular salary/bonus.
I tend to think of it as a long term investment. Also messes up a bit mentally since IT returns as well as the brokerage account show those..
Btw, how long have you been working. My ratio is 1.06 currently, but it only became > 1 last March. Time seems to be a big factor here for long term investors.
13 years, my calculation is quite back of the envelope sorts. Did you use pre tax or post tax? Did you get the income from tax returns?
I used post tax income since that is what I recieved in hand. Have been maintaining an Excel ever since I started working,, tracking my monthly income from in-hand Salary, PF contributions (both mine and employer), Income tax refund (since this is still cash in your hand which should have been recieved as part of salary). This also helps me in tracking my high level expenses month-on-month.
Is the denominator after-tax or pre-tax?
I've seen some sources use the pre-tax income, but I don't see how that makes sense. It's not like the tax you pay reflects on your net worth in any way.
Cool.. I have all the data but would need some time to calculate ...pls include the number of working years while sharing the data...
I have been working for 17 years now!!! and my NW/Earnings ratio is 0.91 Earnings includes, Salary + Vested RSU Networth includes, current value of EPF + PPF + all Stocks + all MFs + FDs If i include my EPF contributions to earnings then ratio is 0.87 and if i include employer's contribution as well then it comes to 0.83
I have been working for 17 years now!!! and my NW/Earnings ratio is 0.91 Earnings includes, Salary + Vested RSU Networth includes, current value of EPF + PPF + all Stocks + all MFs + FDs If i include my EPF contributions to earnings then ratio becomes 0.87 and if i include employer's contribution and my contribution then it comes to 0.83
Thanks for sharing as it seems like an interesting concept. Would be worth doing this backdated analysis ... however don't think it has any impact in the FIRE journey though (well we are already FIREd so a bit too late for that anyways ;-) )
That's true, it's probably most helpful for someone working towards FIRE who wants to course correct, either on how much they are saving or whether compounding is really working for them. Still, it would be good to get estimates on this ratio from FIREd people such as yourself for benchmarking!
Agree. Will pull up the data, do the analysis and post it tomorrow
0.5.
[удалено]
Do you mean that the ratio is 3:1? That's super high! Are you FI?
Yes, FIREd since 2018 at a relatively young age. Didn't want to suck up to a corporate job anymore!