Ep. 141: Power Percentage Part 2

It’s time we talk about Power Percentage. Again. Ever since my podcast on this topic a few weeks ago, I’ve been receiving lots of questions. If you have no clue what a Power Percentage is, check out Episode 120 or watch the first episode of PTPTV. To summarize, it’s the best way to measure the health of your financial life. Ever. It’s a way to see how much of your income is being used to move you forward.

Here are some of the questions I address:

  1. What is and isn’t included in my power percentage?
  2. Why isn’t transportation included in my power percentage?
  3. What if I have no debt and no mortgage, how can I increase my power percentage?
  4. What if my company has a pension plan rather than a 401(k)?

Finally, I talk about how to make your Power Percentage go up TODAY. The goal is to keep this number increasing from year to year. The fastest way to move yourself up today is to increase your contribution to your employer’s 401k plan. It’s quick, it’s easy, and it can have a big impact on your both your Power Percentage and your future as a whole.

Here’s the key, for your reference:

  • 10% and below – Eh
  • 11% to 20% – OK
  • 21% – 34% – Getting there
  • 35% and above – Perfect

2 thoughts on “Ep. 141: Power Percentage Part 2

  1. Hello! I’m liking the Power Percentage metric. Thanks! Follow up question on your point about how to count (or not count) pensions. I’m a teacher. I’m required to contribute 7.5% of my income to our retirement plan. My employer contributes the equivalent of about twice that, or 14.6%. That money contributed by my employer is considered an additional benefit for me, it is not actually coming from my salary. I understand that I shouldn’t count the employer’s contribution, but can I count my 7.5% contribution?

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