Today I’m highlighting the capital to income ratio, which I’d heard about before, but hat tip to White Coat Investor (good new finance blog I found which you should check out) for making me rethink it and share again here. Basically, this is one of the many ratios that Charles Farrell focuses on in his book Your Money Ratios
One-size-fits-all approaches are usually flawed. This is the case when…
Continue Reading Capital to Income Ratio
As if any past measure of “where you should be” (*hack* *cough*) will have any relevance whatsoever in twenty years.
I dunno, I think this one is pretty sound. It takes into account the fact that you have barely saved shit when starting out in life, but by your thirties you should be passing up your annual salary and as you approach retirement, you should have a pretty sizeable nest egg saved. Of course, much depends on whether you anticipate a fixed income (and who can really count on pensions and Soc Security that far out?), so you’ve gotta watch out for yourself with a war chest. I think compared to most of the other crappy “conventional wisdom” out there, this ratio is a pretty good idea.