Here's a shocking truth: You might be richer than 90% of people your age and not even realize it. Or you might be earning six figures but be poorer than your neighbor who drives a 10-year-old Honda. The secret? A hidden formula that reveals your true wealth status.
Research from "The Millionaire Next Door" revealed that most millionaires don't look like millionaires. They drive used cars, live in modest homes, and you'd never guess their net worth. Meanwhile, many high-income earners are actually "income rich, wealth poor."
The question is: Which category do YOU fall into?
Dr. Thomas Stanley's research identified a simple formula that predicts what your net worth SHOULD be based on your age and income. It's not about how much you make—it's about how much you keep.
(Age - 27) × (Annual Income ÷ 5) = Expected Net Worth
Example: 40 years old, $80,000 income
(40 - 27) × ($80,000 ÷ 5) = 13 × $16,000 = $208,000
Net Worth: Less than 50% of expected
High income, low wealth. Lifestyle inflation has consumed your earning power. You look rich but aren't building wealth.
Net Worth: 50-100% of expected
You're doing okay but not exceptional. Following conventional wisdom but not optimizing for wealth building.
Net Worth: 200%+ of expected
You're a wealth-building machine. You might not look rich, but you're financially independent or close to it.
Age: 35 | Income: $120,000 | Expected Net Worth: $192,000
Actual Net Worth: $45,000 (23% of expected)
Reality: $800 BMW payment, $3,000 rent, designer clothes, expensive vacations
Status: Looks successful, actually broke
Age: 45 | Income: $55,000 | Expected Net Worth: $198,000
Actual Net Worth: $485,000 (245% of expected)
Reality: Drives 2015 Honda, modest home, invests 25% of income since age 25
Status: Looks ordinary, secretly wealthy
Offense: Increasing income through skills, side hustles, and career advancement.
Defense: Keeping expenses low and avoiding lifestyle inflation.
While most people spend 50% on needs, 30% on wants, and save 20%, secret millionaires flip this:
The average millionaire drives a 4-year-old car and keeps it for 10+ years. They understand that cars are depreciating assets, not wealth builders.
A $500 car payment invested at 8% for 30 years = $679,000
That luxury car isn't just costing you $500/month—it's costing you nearly $700,000 in retirement wealth.
Before any purchase, they calculate: "How many hours of after-tax work does this cost?" A $200 dinner becomes "8 hours of work for 2 hours of eating."
Why don't people realize they're wealthy (or not wealthy)? Three psychological traps:
Ready to discover if you're a secret millionaire or if you need a wealth reality check? Our Net Worth Calculator will show you exactly where you stand and what you need to do to join the PAW club.
Plus, use our compound interest calculator to see how small changes in your savings rate could dramatically accelerate your wealth building.
Want to move from UAW to PAW? Here's your action plan:
Most people will never become wealthy not because they don't earn enough, but because they don't keep enough. The millionaire next door isn't driving a Tesla or wearing designer clothes—they're quietly building wealth while everyone else is building an image.
The question isn't whether you can afford that luxury purchase. The question is: Can you afford NOT to invest that money instead? Your future millionaire self is counting on the decisions you make today.