MM, you have the rights to your privacy, and I would do the same if I were you. One other reason people are curious about your job income versus the total household income is to make you a yardstick to measure their success. In other words, if you make $X/year and save $Y/year, it follows that I should at least save $Y/year if I make $X/year. I think disclosing the total household income from your and your wife's jobs minus your "hobby" income could be more informative. However, you can just as easily disclose the percentage of income that you save every month or year without disclosing anything about your income, which will still yield the same result for everyone. :)

MM,

Fatboy hit the nail on the head. One of the supplemental schedules I am adding to my 12/31/2005 financial statement are a dozen different ratios (net income as a % of total revenues, net income as a % of total after-tax revenues, etc.). My wife and I, with a combined household income of $50,000, had a net income about 25% of gross income. I think this number is decent, but I would like to compare it to others. Sadly, it seems that most blogs lack this disclosure.

As always, thanks for the great blog.

Good comment. However, I'll argue it is much more difficult to save 10% from $20,000 household income than saving 20% from $200,000. (On the other hand, growing 10% from a net worth base of $400,000 is considerably harder than growing 20% from $20,000 -- with the same income stream.) While I certainly adopt a lot of ratios when I compare multiple years of my own record, I'm not so sure % is a good way to compare with others.

CPA1298, I earn about mid-thirties and my net worth goes up an amount equal to about half my pay in any period. (I'm guessing this is what you're asking about.) But I've had time to get my net worth up to about $170,000. The higher one's net worth (and the smaller one's income), the easier it is to increase it by some large percentage of your income, even with just a small return.

One could argue convincingly that everyone is unique, so you can't compare at all. Nevertheless we can still learn from each other. I find percentages to be more comprehensible than amounts when I'm learning from someone who makes multiples of what I make.

Debbie - congratulations on accumulating a net worth of $170k on income in the mid-thirties. Can I ask if this savings was from that income, or was there an extraordinary event (ie. inheritance, etc.)? If you can live on the $30k, the net worth should take care of itself.

CPA1298 - Actually, most of my net worth was accumulated on an income in the mid-twenties. There was no extraordinary event, although I have no dependents and am 43 years old, so I've had some time.

I have three extreme strategies: 1) I buy most clothes at thrift stores. 2) I buy ten-year-old reliable cars for cash and keep them for ten years (with no collision insurance). 3) My house is a small one in a safe neighborhood on the wrong side of the tracks, so to speak, and I have a paying housemate.

These strategies let me do four things most people don't get to do: 1) I live debt-free besides my mortgage (to be paid off when I'm 50). 2. I save money. 3. I go on fun vacations. 4. I get to retire when I'm 52 (best guess so far). (That retirement thing is partly because I work for the state and still get a pension--that's pretty extraordinary nowadays.) Plus I get to do plenty of things that most other people also get to do like watch movies and eat out too much.

Debbie -

I like your 'extreme' ideas. It's sad that they are extreme, but in today's materialistic society, living in such a way is very rare.

My wife's family is a similar story. My father in law was the sole breadwinner for most of the time, and worked as a school teacher. They raised seven kids, and put them all through parochial school and paid for college for all seven, as well as modest weddings for the four daughters. All this while paying off a house, without any help from inheritance, etc. They also had some extreme ways of living - all kids wore yardsale clothes, the cars were used, vacations were infrequent and modest, no meals were eaten outside of the home, etc. I respect them for their accomplishments, and their common-sense approach could be applied by many to great benefit.

Debbie, sounds like a good strategy that pretty much anyone could employ. Would be nice to have some guide for how to pull it off without relapsing for those not currently accustomed to that minimalism in those particular areas.

Living debt free is super hard with so many enticing offers out there for credit and financing. Kudos to those of you who can do it.

I'm preparing to cut up 3 or 4 credit cards next month.

I've managed to accumulate a networth of about 4 times my annual salary since i graduated & started working in 1999. I have a non-working wife who's going to grad school and I've achieved it by living below my means and investing my money. We splurge on vacations but thats about it. We'll splurge on other stuff next year when my wife graduates and she'll start working.