How am I doing financially?

Sometimes I find myself reviewing my objectives and achievements. When it happens, I think it can be difficult to determine a proper benchmark to use as a term of comparison, to understand if my performance is either good or bad for example.

In this article I will try to address this issue and offer several methodologies which may help answering the critical question: how I am doing financially?

GDP per capita (2016)

First, let me offer a look at the world's GDP per capita chart.

GDP per capita in the World (2016 data)

As you may know from my 'About' page, I currently live in the UK.
The GDP per capita in this country is $42,105 for 2016.
Also, let's have a look at the evolution of GDP per capita in the UK over time:

GDP per capita evolution in the UK

Interestingly, the last 10 years show great variations in GDP per capita values. Who knows if the decision to exit the European Union may lead the UK to beat its historical record of $48,428...

The above facts allow me to draw the following observations:

• My annual income (estimated in $58,000 - 1.29 £/$ exchange rate - before taxes and without taking into account overtime) is greater than the GDP per capita of this country. Surely this must be positive for me.
• When thinking about the future and where I want to be living in the long term, it may be a good idea to keep an eye at the global GDP per capita list as it is a good indication of countries where it is possible to enjoy particularly good standards of life.
• Once more, I made the right choice to leave Italy which, as it stands, does not offer great prospects to young talents like me.

UK distribution of wealth

Let's now have a look at the wealth distribution in the UK across the population:

My annual income would generally take me to the top of the 30-50k£ band. However, as my new job has allowed me to do a significant amount of overtime, I sit happily in the 50-70k£ band. In am in the ~top 10% of UK earners.
Actually, according to the below table, my yearly income is even above the mean value (£49,960) of the group top 10% to 1%. Not a bad place to be!

UK high earners

Income by age group

Let's now see how I compare to people with similar age.

The median pre-tax income for someone aged 29 is about £25,000 (male). So I am off the charts. Actually, my income does not fit in the above graph, so I will need to dig a bit deeper into this.
I've found a great website, salarygraph, which has helped me visualise more details about my wage.

Annual UK gross income distribution by age (22-29)

Compared to people in the age group 22-29 living in the UK, I comfortably sit in the 90 percentile; this is again off the chart, but arguably it's a bit unfair to compare myself to that group as I am 29 and at the top of my band (sadly!). So let's change the parameters and have a look at 30+ years old.

Annual UK gross income distribution by age (30-39)

Ok, this is better. I still sit in the 90 percentile and I am now comparing myself to older individuals!

Conclusion

I think I can say that I am doing very well.
In the last 12 months I changed job and this has considerably improved my income situation.
My saving rate has never been better, and my ability to invest money has consequently been boosted.

I am in the 90 percentile for gross income, I have a relatively stable job and I earn much more than my peers in the same age group.

Despite the Brexit concerns, I should do just fine financially.
To get where I am has not been easy, requiring lots of sacrifices and huge efforts, but I am very proud to say that now it's payback time!

Yours,
The Gentleman Investor

Sources: Wikipedia, Salary Graph, HM Revenue and Custom study on distribution of income and tax by age range and gender.