tag:blogger.com,1999:blog-32639162.post7274051855201819181..comments2023-12-07T01:00:56.264-05:00Comments on My Wealth Builder: Wealth Builder Ratios - Q3 2007 UpdateSuper Saverhttp://www.blogger.com/profile/11172939501208456194noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-32639162.post-11676007906574851622007-10-04T15:57:00.000-04:002007-10-04T15:57:00.000-04:00Pfstock,Agree averaging over a longer period is a ...Pfstock,<BR/><BR/>Agree averaging over a longer period is a good idea for understanding performance. I did it over a quarter to understand what it might look like in retirement when I have to withdraw money, irrespective of market preformance. This analysis has led me to plan on setting aside three year's income needs in a interest bearing account. That way market fluctuations will have little emotional impact when we withdraw. <BR/><BR/>Mathematically, you are correct about the denominator effect on the ratios:-) However, for us, increases in income ultimately helped since we saved a higher percentage of the after tax income - i.e. spending growth was much slower than income growth.Super Saverhttps://www.blogger.com/profile/11172939501208456194noreply@blogger.comtag:blogger.com,1999:blog-32639162.post-42277367957820640762007-10-01T19:26:00.000-04:002007-10-01T19:26:00.000-04:00Hi Super Saver: How's it going? I'm glad to see t...Hi Super Saver: How's it going? I'm glad to see that you've posted an update to your numbers. The "investment income to salary" ratio is definitely a volatile one. I prefer to average my numbers over a three-year term. I could see that ratio easily turn negative in a short-term bear market.<BR/><BR/>Since "salary" appears in the denominator of all of your ratios, a decrease in that number (i.e. a pay cut) would <I>improve</I> all three of your numbers. Ironically, a raise may actually put you further from your goals.pfstockhttps://www.blogger.com/profile/16235204038486228085noreply@blogger.com