Dr. Wall continues his series on money and marriage (for the first in the series click here; for the entire series click here) by discussing the effects of living wisely over time. Unfortunately, most of us are too busy spending our lives away to notice.

“For those who spend money in anticipation of being wealthy, that day never comes.”[1]

Dr. Thomas J. Stanley

In our society, the public, you and I, are called Consumers. Crap. We’re also a nation of hoarders. That show on TV about hoarders and living in a house filled with filth? That’s you and I. All this stuff. Like stuff is going to make you happy? It ain’t working, is it? The more you get, the more you have to take care of and clean and sort and organize or reshuffle and re-sort and move around. Rats in a maze. And we’re all thinking we’re happy. And then we’re really not so we think if we had even MORE stuff we’d be happy and then we don’t have anywhere to put it and now we think we need a bigger house or a bigger car or more land or….always looking to the next thing, thinking things will make us happy. And everybody is touted on the ads with their happyhappy smiles and we’re all so happy…

But we’re not. Stuff doesn’t satisfy. It’s a pretty small god. The more you have the more you want the more you buy the more you stress the more you worry the more you fret the more you buy to feel better about the misery you are in.

And a round and a round we go.



And when you run out of money, put it on plastic….’cuz I waaaaaaaaaaaant it.

Our economy depends on you and I living as crazy people with no patience, no foresight, no wisdom, no planning, and no discipline at all. Just a herd of buffaloes all going off the cliff together.

Frankly, I’m sick of all of that.

Aren’t you, too?

We’re addicted to stuff. We’re addicted to being broke.

And we’re all so stressed and then you gotta wonder how you are supposed to stay happily married in all of this.

Most of us aren’t. Too many of us divorce. And then we’re even broker. Divide all the stupid stuff and the debt. Not much assets to even poke a stick at. Not much that matters anyway. How long does it take to recover from a divorce? Financially, I mean. Two lifetimes? Emotionally, it’s a mess that no new lover can fix.

Come on, people. It’s time to wise up.

What would happen if, instead of Consumers, you live as a Saver, instead? Over time, your net worth would go up and pretty soon you’d wake up and see that it adds up. It turns out that patience is a virtue after all.

In our last blog we discussed the formula for net worth. In sum:

Net worth = your assets minus your liabilities.

Or, to say it another way: what you own minus what you owe.

So if your house is worth $200,000 and you owe $120,000, your net worth in the real estate category is $80,000. You can do the same for your car, and add in your retirement and savings and subtract all your debts. You hope this number, your net worth, is in the positive! If you owned your car and it’s worth $5000 and you had $5000 in savings and $5000 in credit card debt and $50,000 in your retirement program, your net worth would be $200,000 plus $5000 plus $5000 plus $50,000 minus $120,000 minus $5000 equals $135,000.

If your house was worth $280,000 and you owe $180,000 on it and then you take out a second mortgage to put on a new roof and add a new garage or whatever and borrow $40,000 on your house and then the crash of 2007 happens and now your house is worth $200,000, your net worth in real estate is -20,000. If you owed $10,000 on your car and it’s worth $5000, and you have $40,000 in student loan debt and $10,000 in credit card debt and you have $1000 in your checking account and no savings, your net worth would be $200,000 plus $5000 plus $1000 minus $180,000 minus $40,000 minus $5000 minus $40,000 minus $10,000 equals -69,000.

Over time, year by year, if you are living wisely and within your means, on average, this number, net worth, should go up. Yeah, we’ll have down years, like the stock market crash of 2007, but your life isn’t over in a year. We keep plugging away, we keep paying down our debt, we keep socking money away for retirement, we keep saving to pay cash for our next car and the next after that and you wake up one day and, what do you know? You aren’t broke any more. Dang.

I said in my last blog that Dr. Stanley (The Millionaire Mind) uses net worth to calculate two different kinds of so-called rich people: Those whose net worth greatly exceeds their income, whom he calls “Balance Sheet Affluent” or BAs and those who spend everything they make and only look wealthy, whom he calls Income Statement Affluent or IAs.

He suggests BAs live for the future and IAs live for the now and lookin’ good. BAs feel secure; IAs are a house of cards and most will either crash or have destitute retirement years or both. He would say the large majority of us, upwards of 95%, are living as IAs. We live in great neighborhoods with awesome homes and drive new cars, but we’re broke. We only LOOK good.

If you read between the lines, Dr. Stanley’s really saying we’re a nation of IAs. We’re all looking good, but it’s all a show. Our government is living this way, too, thinking that the American economy will always be there to pay these bills we’ve accumulated as a society of folk who are living beyond our means. We’re all crazy people.

Wake up, people! Sooner or later this bill will have to be paid.

Last year our government spent more than it took in in revenue.

Way more.

Way, way more.

Last year, too many of us, single and married, spent more than we made.

This ads up to less than nothing!

The only way to succeed financially is to SPEND LESS THAN YOU MAKE.

We need to do this as a society, too.

It probably isn’t going to happen as a society, but I don’t want to be part of the problem. I can’t do much about the national debt, but I can do something about my own.

Dr. Stanley is suggesting that we start having a little fortitude and start living within our means.

So….when does a person become a BA? He’s got several formulas, but basically it’s two times your Expected Net Worth. Expected Net Worth is what you should be worth at any given age (using the age of the major breadwinner), which he computes by multiplying your age times your annual income times .112.


Your age X annual income X .112 = your Expected Net Worth.

For example, if you and your spouse’s annual income is $100,000 and you are both 45 years old, your expected net worth would be 100,000 X 45 X .112 = 504,000. If you had a net worth of less than half of that ($252,000) he would call you an Income Statement Affluent (IA). This would mean you are living beyond your means. If you had a net worth of twice that amount ($1,080,000), he’d call you a Balance Sheet Affluent (BA).

IAs live above their means. They have a high income but little to show for all their work. BAs live below their means, but due to savings and wise investing over time, their wealth grows substantially.[2] Or as Dr. Stanley wrote on his blog:

If you are in the Balance Sheet Affluent category, also known as prodigious accumulators of wealth, your net worth should be twice the expectation (Quoted here.).

He also suggests that using your mortgage as a gauge of your net worth is really a ruse and gives an unrealistic picture of one’s true net worth due to the fickle nature of housing values and the costs to keep it going with upkeep and taxes. He writes, to include your house in the formula for net worth, then, instead of net worth, he would call it “augmented net worth.”

As evidence for this revision, he suggest take look at the inflated number of millionaires prior to the crash of 2007 and how many of them instantly ceased being millionaires as soon as their housing values dropped! He writes:

“Looking back, many of these enhanced millionaires once thought that they were truly wealthy. And why not? They used the La-Z-Boy approach to accumulating wealth. While merely lying back in their recliners, they watched TV and the value of their homes skyrocket in value. And those who continued to take out equity loans to buy rapidly depreciating assets are now facing a harsh reality. Today many homes that were worth $1M or more two years ago are now appraised at their 2000 value.”

So here’s what I suggest you do: You and your spouse work through this formula together and see how you are doing. My guess is that most of us haven’t accumulated much wealth. We’re too busy burning the candle on both ends, running the kids here and there and buying what we need when we need it. The problem with this is that you can wake up one day and realize you have NOTHING to show for all your hard work. That’d be sad, particularly since it’s not necessary! Of course, it would take both of you, together, to realize this goal, of shifting from an IA to a BA.

That would mean you’d both have to work together.

And since money is one of the major issues that lead couples to problems, if the two of you could be on the same page in over-all financial goals (like having something someday!), you’d be amazed how this will help your overall relationship: I.e. your relationship would improve!

Cool. That’d be a plan.

Working together toward the same goal? That sort of sounds like a formula for marital success to me. That would mean you’d both have to NOT BE SELFISH. That’d mean you’d both have to SACRIFICE. That’d mean you’d both have to be FRUGAL. That’d mean you’d both have to be PATIENT.

You add those things up over a lifetime and whadayaget?

A little security. A little blessing. Being able to be a blessing to others. Being able to give. Being able to be generous. Being able to leave an inheritance to your grandchildren.

Grandchildren? Most of us barely have enough left in our checking account to pay for lunch today, let alone leaving an inheritance to our grandchildren.

Hey, faithfulness over time adds up.

Stupidity over time messes up.

You do the math.

Where you at?

[2] Stanley, Thomas J. (2000). The Millionaire Mind. Kansas City: Andrews McMeel Publishing, p. 78.


This is the third in a series of blogs on Money and Marriage.  To see the entire series click here.  The first in the series is:

Part One on Money and Marriage: Some Random Thoughts on Labor Day: Who Are You Working For?

On this Labor Day, Dr. Wall ponders who really owns everything.

The second in the series is:

Part Two On Money and Marriage: Net Worth and Your Road To Wealth

Dr. Wall continues his series on money and marriage by looking at the concept of net worth and how wealth is built slowly over time. This is NORMAL for successful married couples because they plan to married for their entire lives! Being married for your lifetime pays off. Have a look see.

For other blogs on money and marriage see:

Pick-Me-UP: Hard Core Savings And The Road To Wealth

Dr. Wall encourages us to kick savings into gear in order to get our financial house in order.  Money problems can run havoc on a marriage.  Agreeing on the overall plan can bring both the husband and wife together and bless their lives at the same time!

A Marriage Improvement Program: Get OUT of Debt!

Dr. Wall theorizes that marriage problems increase as debt increases and that one sure-fire way to improve your marriage is to start working together as a team on knocking your debt out ASAP!

A Little “Getting-Out-Of-Debt” Inspiration

Dr. Wall ponders what your future could be without all your debt.  It’s time to kick it in the butt.


Dr. Bing Wall is a marriage therapist with a practice in Ames and Urbandale, Iowa.  To set up a time to see Dr. Wall click here or call 888-233-8473.  For more information about Dr. Wall click here.

To schedule an appointment with Dr. Bing in Ames, Iowa click here

To schedule an appointment with Dr. Bing in Des Moines click here