An Even Better Measure
 

An even more relevant way of gauging your progress in achieving wealth is how your net worth changes per hour worked. This can’t be determined until you’ve figured out your net worth on two occasions, but it’s a more accurate measure of how effective you are.

If you increase your net worth $100,000 in the space of a year, and you worked 2,000 hours that means you increased your wealth by $50 for every hour you worked that year. Even if you were only paid $50,000 that year, if your worth increased by twice your gross income that means your assets are working for you and are increasing in value without you – exactly what you want. You’re on your way to stepping off the work treadmill.

However, if your worth decreased by $10,000 in a year and you worked the same 2,000 hours, that means you lost $2 for every hour worked. Clearly if that happened, you could be doing some thing better. By all means don’t stop working – that’s not the problem. But examine why you’re losing wealth and make changes to reverse course.

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