Confused about Investment Goals vs Prodigious Accumulator of Wealth?
Hi everyone,
So I just started listening to the Money Guy podcast last month, and I'm catching up through the back catalog of the last year. From what I can tell, the guys have referenced two different ways of calculating how you're doing at each decade in life at 40, 50, 60, and 65 years old -- the investment goals and the prodigious accumulator of wealth (PAW) of [(Age × Annual Income) ÷ 10] x 2
I'm a bit confused, however, because if you compare the investment goals vs the PAW, they don't seem to line up. At age 40 and 50, the investment goals considerably lag behind the PAW. But then at age 60 and 65, the PAW falls behind the investment goals.
IG PAW
Age 40: 3x vs 8x
Age 50: 6.4x vs 10x
Age 60: 13.7x vs 12x
Age 65: 20x vs 13x
I fully admit, I'm still new, so maybe I'm just interpreting this wrong, but I'd love to see what you think. Thanks!