EPI / RON Wealth Indicator

How to use this calculator

1. Enter your current age in years.
2. Enter your household’s annual income; use a representative figure for your current earning level.
3. Enter your net worth, defined as total assets minus total debts (including home equity, investments, and liabilities).
4. We compute EPI and RON expected wealth benchmarks based on your age and income.
5. We divide your actual net worth by each benchmark to produce EPI and RON wealth scores.
6. Review the scores to see whether you are accumulating wealth faster or slower than these simple reference lines.

Inputs explained

Age

Your current age in years. Age is used in these formulas to scale expected wealth upward as your working years accumulate.

Household income

Your annual household income before taxes. If income fluctuates, use a recent multi‑year average to avoid overreacting to a single unusually high or low year.

Net worth

Your household’s total assets minus total debts, including home equity, retirement accounts, taxable investments, cash, and vehicles on the asset side, and mortgages, student loans, credit cards, and other debts on the liability side.

When to use it

• Benchmarking your net worth against age and income using familiar Millionaire Next Door–style formulas.
• Checking whether your wealth accumulation rate is on track, lagging, or exceeding expectations given your earnings.
• Illustrating how lifestyle choices, savings habits, and debt affect long‑term wealth relative to income peers.
• Comparing different what‑if scenarios—such as earning more, saving more, or reducing debts—to see how scores change.

Tips & cautions

• EPI is more forgiving; RON is stricter. Many people will be closer to or above 1.0 on EPI and below 1.0 on RON—that’s normal.
• Use a realistic, possibly conservative income figure that reflects your typical earning power rather than a one‑time spike.
• Recalculate periodically as your age, income, and net worth change to see whether you’re closing gaps or widening leads over time.
• Treat these metrics as conversation starters, not final judgments; they ignore important factors like region, family size, and career stage.
• Simplified formulas; they do not adjust for cost of living, household size, career breaks, or the mix and riskiness of your assets and debts.
• Based on rules of thumb from popular finance literature, not on formal financial planning or official wealth standards.
• Young high earners and older low earners can look skewed under these formulas because they do not consider time in career or retirement phase explicitly.
• Not a replacement for a comprehensive financial plan that considers goals, risk tolerance, and detailed cash flows.

Worked examples

Deep dive

FAQs

Where do these formulas come from?

They are inspired by wealth benchmarks popularized in Thomas J. Stanley’s research (for example, age × income ÷ 10) and adapted here into EPI and RON indicators. They are rules of thumb, not official standards.

What does a score above or below 1.0 really mean?

A score above 1.0 means your net worth exceeds that benchmark’s expected wealth; below 1.0 means you fall short of it. However, the formulas are simplified and do not account for region, family size, or personal goals, so interpretation should be cautious.

How should I use this in my planning?

Treat it as one lens among many. If you are far below both benchmarks, you might explore ways to increase savings or reduce debt. If you are comfortably above them, it may confirm that your saving habits are strong, but a full plan should still address risk, taxes, and retirement income needs.

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