Millionaire expert and noted author Thomas Stanley developed a quick formula in his book "The Millionaire Next Door" to determine if someone is an average accumulator of wealth. In order to make this calculation simply 1. take one's total income 2. multiply it by their age and then 3. divide the result by 10. If this approximates their Net Worth than they are an "Average Wealth Accumulator". If their net worth significantly exceeds the result they are known as a "Prodigious Wealth Accumulator". If their net worth is significantly lower than they are an "Under Accumulator of Wealth". Apply this test to Larry and Louise Tate, whose financial statements are listed on pages 37 and 41. How did they make out? Assume they are 35 years old. FINANCIAL RATIOS Distinguish between the primary purpose of Liquidity Ratios (Question 1 on p. 40), Solvency Ratios (Question 2 on p. 42) and the Savings Ratio on page 43. CASH BUDGET How does the personal financial statements help the financial planner prepare a cash budget for a client?