Much the same was true of credit cards. A millionaire was nearly 7 times as likely to leave home with a Sears card as with an American Express Platinum card. Stanley and Danko say that UAWs are often proud of their home mortgages and the amount of tax deductions they have for mortgage interest. PAWs, on the other hand, save money by living in more modest neighborhoods, having smaller mortgages. Indeed, the authors suggest people interested in wealth accumulation limit their home purchase price to no more than 2 times annual income, about a third less than the amount for which most households will qualify.
PAWs usually know who they are.
UAWs, however, are often surprised when they learn that their possessions are not the same as actual wealth. Using consumer finance data, Stanley and Danko, have a simple test for whether you are above or below the trend line for average people with your income. An average wealth accumulator will have a net worth equal to one tenth of their age times their realized household income. The authors define those in the top 25 percent of their age group for wealth as PAWs and those in the bottom 25 percent of their age group for wealth as UAWs. Questions of general interest will be answered in future columns.