I recently met a young guy, Daniel, who blew me away. And let’s be real here, it takes a lot to blow me away these days. Daniel’s situation isn’t very different from a lot of people. He makes an average income for his age and he has debt of varying kinds. But Daniel is a hard worker. A really hard worker. And even better, he has the numbers to prove how much effort he is putting in. Let me show you.
Daniel’s story starts with his net worth. You know this because I say it all the time, net worth is where it’s at. Net worth isn’t just for wealthy people. Net worth is simply a calculation. It’s all your assets minus your debts. Your net worth will either be positive or negative, and whatever it is, it gives you a starting point.
So back to Daniel, he began by collecting all his numbers.
He determined his net income for the year to be $26,081.
He determined how much he and his employer had saved for his retirement (and even factored in growth) for a grand total of $2,100.
He checked his savings account to confirm he’d saved $750 for emergencies.
He then calculated how much he paid toward debt this year, which broke down like this:
$4,400 in paid off credit card bills.
$995 toward his student loans.
And he paid off his remaining car loan balance of $1,040.
The total Daniel was able to save or use to pay off debt totaled up to $9,285. This is obviously a decent chunk of money, but considering his take-home pay it’s unbelievable. I wanted to see exactly what percentage of his take-home he’d used to increase his net worth so we divided $9,285 by his take home pay and we determined this year Daniel used 36% of his income to fix his financial life. AMAZING!
The challenge is for you to now go through your own numbers. Your goal should always be to either save more money or pay off debt, since both of these positively impact your net worth. Think of this calculation as a sort of “score” of your effort. You likely won’t be quite at Daniel’s level, but his dedication to his financial future should inspire you to do better.
And remember this isn’t necessarily about building wealth. It’s about doing the best you can with the resources you’ve been given. It doesn’t take a lot of money to make smart decisions, and conversely having a lot of money doesn’t determine how healthy your financial life will be. Your effort is the deciding factor.

Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.
Hi Pete,
I believe in keeping score with a ratio called the Prodigous Saver. I think it may have come from the book the Millionaire Next Door. Anyway, I think the inputs to the ratio are net worth divided by your income multiplied by your age divided by 10. For example, say a 50 yr old has income of 50,000 and a net worth of $250,000. Her Prodigous Saver ratio would be 1.00 (250,000/(50,000 X 5)). I think the idea is to shoot for a 1.00 factor or higher. In addition to keeping track of our net worth this factor (PS) sort of gives my wife and I a way to standardize our net worth taking into account our income to keep us on track. Enjoy your posts. Brad