The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: arebelspy on May 16, 2014, 06:16:08 PM
-
This came up in another thread (http://forum.mrmoneymustache.com/share-your-badassity/one-more-penny/), but I thought it was cool enough to start its own thread so more people see it.
Essentially the idea is to figure out how much passive income you're receiving and put that into an hourly rate.
As of August 2013, the average American works about 1700 hours/year (http://www.businessinsider.com/average-annual-hours-worked-for-americans-vs-the-rest-of-the-world-2013-8).
So if you take your stache size and multiply it by 0.04 (for a 4% SWR, 0.03 for a 3% SWR, and so on), you get your annual income at your chosen SWR. Dividing that by 1700 then gives you the hourly rate at which your little green soldiers are working.
Say, for example, you have a stache of 200,000. That would provide you 8000/yr at a 4% SWR. Someone working 1700 hours to warn that would be getting paid $4.70/hour.
To get your stache up to a minimum wage amount of $7.50/hour, working 1700 hours, you need approximately 320k.
To make a minimum wage of 7.50 per working hour, you'd need a stache of $318,750 at a 4% SWR.
In other words if your stache is 320k or more, your passive income is like having a person working a full time, minimum wage job for you.
And, of course, if you have a stache of 1.28MM, that's like having an extra person working a full time job that pays 30.12/hour for you. Or you could think of it as 4(!) people working full time, minimum wage jobs for you. That's pretty awesome.
Thought that was fun to figure out both the total hourly rate that my stache is earning as a full time job, and how many full time minimum wage workers are working for me. :)
-
Ha, I like thinking of it this way. Be right back, got to do some maths.
-
I like the idea, but money never sleeps so I think we should use 24/7/365.
Edit: I'm also sure Jacob at ERE mentioned this concept, but can't find it.. Might only be in the book
-
My 'stache is unemployed 11 months out of the year.
-
I like the idea, but money never sleeps so I think we should use 24/7/365.
Sure, money doesn't sleep, but I never liked the concept of 24/7/365 because it feels silly to me to stretch it out over the night and weekend, because I wouldn't be working that time anyways. Sure, it's fun to say "I make $XX every hour, even when I'm sleeping" but then you can't compare it to minimum wage, or to what most people make per hour or whatever, to do that you'd want to compare it to how many hours they work.
All of the hourly wages we hear (minimum wage at 7.50/hour, or a professional making $30/hour, or whatever) are only working hours.
So I liked the concept of "working hours" and using the 1700 number, rather than 24/7/365, which isn't possible to compare to a normal hourly wage.
-
$11.88/hr.
DH is not comfortable with a 4% rate, so I've used 3% instead. I also work more than 1700 (how was that calculated?). I have 2 weeks vacation (sadly), 3 personal days, and 11 holidays - but a 7.5 hr "official workday" so I used 1770 instead.
I need almost a quarter of a million dollars more to have two minimum wage employees (at state min wage).
-
We are at about $31/hr then, which is like 20 Chinese working in a sweat shop on the new I-phone. This is fitting since I own a chunk of Apple stock.
-
I'm happy to report my stache employs approximately one full time minimum wage employee. I feel very fortunate to be in this position, particularly considering there are many people trying to get by on a minimum wage salary.
Really puts things in perspective when you consider how hard someone else has to work for that kind of cash. I'm not saying I didn't "work hard" to save it, I'm just saying it feels good knowing I will never have to struggle to earn a minimum wage since my stache already does it for me.
Thanks strider3700 for the original post, and arebelspy for breaking it down into a typical work week.
-
I also work more than 1700 (how was that calculated?).
See the second link from the OP - it's how much the average American works (as of Aug 2013), according to economic data from The St. Louis Federal Reserve.
I'm happy to report my stache employs approximately one full time minimum wage employee. I feel very fortunate to be in this position, particularly considering there are many people trying to get by on a minimum wage salary.
Really puts things in perspective when you consider how hard someone else has to work for that kind of cash. I'm not saying I didn't "work hard" to save it, I'm just saying it feels good knowing I will never have to struggle to earn a minimum wage since my stache already does it for me.
That gratitude is such an awesome attitude, love it.
We are very fortunate, those of us posting on the MMM site, for a number of reasons. Getting this perspective on my stache really helps me appreciate how lucky I am, versus a feeling of it not being enough (which I rarely experience, but understand why one might, in their striving for FIRE).
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
-
Another thing to think about is that $30,000 cell phone you are carrying around.
$100 a month phone contract is $1200 a year which takes a stache of $30,000 to support @4% SWR.
-
That gratitude is such an awesome attitude, love it.
We are very fortunate, those of us posting on the MMM site, for a number of reasons. Getting this perspective on my stache really helps me appreciate how lucky I am, versus a feeling of it not being enough (which I rarely experience, but understand why one might, in their striving for FIRE).
I could just as easily have written "man I'm ashamed/embarrassed my rate is only $7.50 and ARS and Roland are at $30+, and I do admit I occasionally have stache envy. However, the stoic philosophy has become second nature and I'm very excited about that. Perspective is a wonderful thing.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
Hopefully your crappy restaurant patrons tip well. : )
-
I could just as easily have written "man I'm ashamed/embarrassed my rate is only $7.50 and ARS and Roland are at $30+, and I do admit I occasionally have stache envy. However, the stoic philosophy has become second nature and I'm very excited about that. Perspective is a wonderful thing.
We are older than ARS though. (maybe older than you are)
-
I could just as easily have written "man I'm ashamed/embarrassed my rate is only $7.50 and ARS and Roland are at $30+, and I do admit I occasionally have stache envy. However, the stoic philosophy has become second nature and I'm very excited about that. Perspective is a wonderful thing.
We are older than ARS though. (maybe older than you are)
Yeah, I think maybe you are, but I'm older than ARS too. I'm 35. Late to the ER party, but saved a respectable amount (not a mustachian amount) due to mostly frugal ways for the majority of my life. My main point though is it really doesn't matter if yours is bigger than mine. My $7.50 is 1/4 of your $30, but it's > milla's $1, and milla's $1 is > someone else's negative $1, and on and on.
And hell, I'm just glad I have my health, a career making more than minimum wage, all my limbs and senses, a happy marriage, etc. The passive $7.50/hour is just icing Roland, or maybe a nice steak, whatever your fancy.
-
Yeah, I think maybe you are, but I'm older than ARS too. I'm 35. Late to the ER party, but saved a respectable amount (not a mustachian amount) due to mostly frugal ways for the majority of my life. My main point though is it really doesn't matter if yours is bigger than mine. My $7.50 is 1/4 of your $30, but it's > milla's $1, and milla's $1 is > someone else's negative $1, and on and on.
And hell, I'm just glad I have my health, a career making more than minimum wage, all my limbs and senses, a happy marriage, etc. The passive $7.50/hour is just icing Roland, or maybe a nice steak, whatever your fancy.
Yes, very good attitude. We are 44/45 so have had 9 more years to compound our stache. I think we only had about $2/hr 9 years ago.
-
My main point though is it really doesn't matter if yours is bigger than mine.
Absolutely.
As I've said before, the two most important variables for age when you FIRE seem to be: when you find the concept of ER, and how much financial baggage you have when you do. Some of us were lucky to find it early (and even have it available at the right time), others just didn't run across it or it wasn't really "out there". No big deal.
(Also I'm not at $30+/hour.. yet. :) )
My main point though is it really doesn't matter if yours is bigger than mine. My $7.50 is 1/4 of your $30, but it's > milla's $1, and milla's $1 is > someone else's negative $1, and on and
(Emphasis added.)
Oh man, I didn't think about it the other way, being in debt and paying interest.
Say you're 91k in debt (mix of student loans, car, whatever) at ~7% (what student loans often go for nowadays). That means you're paying 6735 in interest annually. To pay that, you'd need to work half that 1700 hours at minimum wage of 7.50.
Or, in other words, you have to work extra at a part time minimum wage job to make up for that interest*. Yikes.
*Now you may not actually do this, but make enough at your normal job, but the point is just like you can think of your stache as an extra person working an extra job for you, you can think of the interest accruing as you needing to work another job. Ouch.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Sourc
Drat.
Nah, your back in 1956! Source: http://jobsearch.about.com/od/minimumwage/a/history-minimum-wage.htm
For me, my $AU1.80ish gets me a Female back to the 1970's in Australia, I think? Source is: http://cbe.anu.edu.au/research/papers/cehspapers/SP07_008.pdf
and i'm not sure on the hours.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Sourc
Drat.
Nah, your back in 1956! Source: http://jobsearch.about.com/od/minimumwage/a/history-minimum-wage.htm
For me, my $AU1.80ish gets me a Female back to the 1970's in Australia, I think? Source is: http://cbe.anu.edu.au/research/papers/cehspapers/SP07_008.pdf
and i'm not sure on the hours.
When I started working, I was paid $25 a week - before equal pay (only just, they were changing the workforce at the factory so that every job only had men or women in it, so they would still pay women poor wages when equal pay came in - and I was probably on a junior's wage - but $AU1.80 and I would have felt RICH!!
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Sourc
Drat.
Nah, your back in 1956! Source: http://jobsearch.about.com/od/minimumwage/a/history-minimum-wage.htm
For me, my $AU1.80ish gets me a Female back to the 1970's in Australia, I think? Source is: http://cbe.anu.edu.au/research/papers/cehspapers/SP07_008.pdf
and i'm not sure on the hours.
When I started working, I was paid $25 a week - before equal pay (only just, they were changing the workforce at the factory so that every job only had men or women in it, so they would still pay women poor wages when equal pay came in - and I was probably on a junior's wage - but $AU1.80 and I would have felt RICH!!
I'm not sure precicely when you started working, but if you look at page 11, in 1970 the minimum wages for females were between 36.59 and 44.19, rates rose significantly over the next decade. I wouldn't be surprised if the percentages of the national miniumum wage haven't changed since then so assuming you were 18 in 1970 then it would be around $25 for the $36.69 wage. I'm not sure how many hours per week were in those wages though... There is also a significant difference between 1973 and 1974 for both males and females.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Sourc
Drat.
Nah, your back in 1956! Source: http://jobsearch.about.com/od/minimumwage/a/history-minimum-wage.htm
For me, my $AU1.80ish gets me a Female back to the 1970's in Australia, I think? Source is: http://cbe.anu.edu.au/research/papers/cehspapers/SP07_008.pdf
and i'm not sure on the hours.
When I started working, I was paid $25 a week - before equal pay (only just, they were changing the workforce at the factory so that every job only had men or women in it, so they would still pay women poor wages when equal pay came in - and I was probably on a junior's wage - but $AU1.80 and I would have felt RICH!!
I'm not sure precicely when you started working, but if you look at page 11, in 1970 the minimum wages for females were between 36.59 and 44.19, rates rose significantly over the next decade. I wouldn't be surprised if the percentages of the national miniumum wage haven't changed since then so assuming you were 18 in 1970 then it would be around $25 for the $36.69 wage. I'm not sure how many hours per week were in those wages though... There is also a significant difference between 1973 and 1974 for both males and females.
No, about the mid 70's - 74?? As I said, it was just before equal pay, and men got a lot more than women. Looked it up - 1972 (the internet must be wrong - I was too young then - must have been 1975). 40 hour week (8 hour day is what labour day is all about in each state). Now that you mention it, I think junior rates went up after that (junior was until 21). And $25 was what I got in my pocket after tax. This was the summer holidays, so I was still at school - worked at Red Tulip factory - the only native speaker of English on the factory floor, trying to get enough money to pay for University.
-
Hope the government doesn't decide the little green employees need to pay SS and Medicare ;)
-
love the idea. Not 100% sure we should be using the Safe Withdrawal Rate and not total average market return rate of 7-8%. The extra percents are still 'working' for you, you are just not using them right away. I see that the SWR is comparable to owning someones wages making a given rate indefinitely. Maybe both would be of interest.
Also 40hr/week*52weeks minus 2 weeks holiday = 2000 hr/year. Does not change the basic coolness of the idea.
Random fun math: 365days * 24hr/day = 8760 hr in a year. 2000 / 8760 = 22% of your life at work. add in a 30 minute commute, am sure that gets over 25% of the year.
Spend less - save more - hit FIRE earlier.
Time to go back to doing the math they pay me to do...
-
woah! so I basically gave myself a $1/hr raise last year, sweet!
-
Hope the government doesn't decide the little green employees need to pay SS and Medicare ;)
Are you paying taxes on your passive income? If so, there's your answer.
-
Another thing to think about is that $30,000 cell phone you are carrying around.
$100 a month phone contract is $1200 a year which takes a stache of $30,000 to support @4% SWR.
This is a great way to think about it!
-
Another thing to think about is that $30,000 cell phone you are carrying around.
$100 a month phone contract is $1200 a year which takes a stache of $30,000 to support @4% SWR.
I know I've seen Jacob write from this perspective back in the ERE days, and it's a good mental exercise.
-
Let's not get into wage differences between men and women in this post. Go start a thread if you want to discuss that, thanks. :)
Also 40hr/week*52weeks minus 2 weeks holiday = 2000 hr/year. Does not change the basic coolness of the idea.
Yeah, I posted why I chose 1700 hours - that's how much the average American works according to data from the St. Louis Federal Reserve. If you have a minimum wage worker to work for you full time and add to your stache, it's much more likely they work closer to that average (of ~32 hrs/week, every week) than the 2000 hours you post. :)
But if you have a larger stache and are wanting to compare that to a professional who does work a lot, you may want to divide by 2000.
You can always argue back and forth over precisely which number to use (maybe your worker is a professional that works closer to 60 hours a week.. maybe they have 3 vacation weeks instead of 2.. but they don't use them), but I figured the amount an average American works was a good number to use as a basis of comparison versus normal a "hourly wage" rate that we hear.
woah! so I basically gave myself a $1/hr raise last year, sweet!
That's awesome, I like breaking it down by time period like that. :)
Another thing to think about is that $30,000 cell phone you are carrying around.
$100 a month phone contract is $1200 a year which takes a stache of $30,000 to support @4% SWR.
This is a great way to think about it!
Yeah, this is a pretty common way to think about stuff in FI, pretty sure MMM has mentioned it as well and probably YMOYL, it's not new. OTOH I hadn't thought about my stache working an extra job for me (I had in terms of what is it earning passively per year, per hour, day, minute, etc., but only in terms of every minute.. not in terms of working hours) until the post linked in the OP, so I thought this was a neat, separate idea worth its own post. :)
FWIW - 30k cell phone - WELL worth it. An extra 3 months or so of working to have a COMPUTER with the INTERNET in my pocket forever?! Hell yes please. (Although you can do it significantly cheaper, so I'd do that.. but if that $100/mo was the cheapest, it'd still be well worth it.) :)
-
My dollars are lazy spoiled Americans, and I keep threatening to replace them with yuan if they don't get their shit together.
-
rofl - this exercise is slightly depressing for some of us XD
But the point is that any positive amount on this calculation is so much better than any negative amount is a great one.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
Hopefully your crappy restaurant patrons tip well. : )
Working on it! This exercise is actually encouraging because, as someone said somewhere, at least it's not negative!
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
Hopefully your crappy restaurant patrons tip well. : )
Working on it! This exercise is actually encouraging because, as someone said somewhere, at least it's not negative!
Milla, I think our soldiers are co-workers. And yes, at least it's not negative....
-
I will play. Because this is a fun game. Only counting liquid investments (not closely held stock or real estate), the Hubs and I have a full time average worker earning about $8.25/hour.
-
So far I think I only have a panhandler working for me. On second thought, panhandlers probably make more per hour
-
Well...I'm pulling in a measly $0.245/hr. But I did graduate school two years ago and just bought a house... Liquid assets are relatively low at the moment. But it's POSITIVE!
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
Hopefully your crappy restaurant patrons tip well. : )
Working on it! This exercise is actually encouraging because, as someone said somewhere, at least it's not negative!
Milla, I think our soldiers are co-workers. And yes, at least it's not negative....
4 cents an hour... Yep... $0.04 per hour!!! At least it's no longer negative!!!!!!!!!!!!!
-
Hmm, yes I'm wondering how home loans are calculated into this. One the one hand you have capital in the home, and potential capital gains. On the other hand you have a loan you need to pay off (currently around 5-6% in Australia with an average of about 8%). Not precisely the same as the student loan position, but still a question.
-
4 cents an hour... Yep... $0.04 per hour!!! At least it's no longer negative!!!!!!!!!!!!!
Glad to see you are out of the hole Mazzinator. I was waiting for that post in your journal. Congrats!
-
Fun game!
My green soldiers make $10.85/hr.
As their boss, I need to work harder in the next 5 years to give them a raise. They deserve it.
-
My dollars are lazy spoiled Americans, and I keep threatening to replace them with yuan if they don't get their shit together.
You Sir are upper management material.
I keep my soldiers in cages with all sorts of age restrictions. They can't get out without the government chopping off body parts as an early exit tax.
-
Hmm, yes I'm wondering how home loans are calculated into this. One the one hand you have capital in the home, and potential capital gains. On the other hand you have a loan you need to pay off (currently around 5-6% in Australia with an average of about 8%). Not precisely the same as the student loan position, but still a question.
Take your total liquid invested portfolio, find the passive income, subtract interest paid?
Or just make it easy (it's just a rough, for fun calculation anyways) and use net worth, which means any mortgage/equity should be factored in already.
-
My little clan of dollars makes a measly $0.59/hr. That's about 1% of what I make per hour.
But hey, just six months ago my dollars didn't make me anything! I'll take .59/hr for now.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
Sorry, servers made $2/14/hour back in the 90's. I know, cuz I was one of them!
-
FWIW - 30k cell phone - WELL worth it. An extra 3 months or so of working to have a COMPUTER with the INTERNET in my pocket forever?! Hell yes please. (Although you can do it significantly cheaper, so I'd do that.. but if that $100/mo was the cheapest, it'd still be well worth it.) :)
Agreed. Whenever I use my cell phone to guide me to a destination, look up information, and of course call people no matter where I am, I tend to think that "this is what money is made for." YMMV.
Another thing to thing to keep in mind is that making $x an hour off of investments vs. regular income is the tax angle: you generally get to keep more from the money made from investments. No FICA tax and likely lower overall tax rate (or even deferred in IRA's/401(k's)) due to favorable treatment of dividends and long term cap gains.
-
I just did this very mental exercise a month ago while on a walk.
$25/hour (from investments)
$35/hour (investments + pension in 9 years)
$50/hour (all of the above + Soc. Sec. in ~20 years)
Yes, I'm counting some of those chickens before they're hatched, but I consider them very safe so I include them in the future. Add in your own Soc. Security or other future benefits you've already earned/accrued, it might make you feel even richer.
-
I'm right there with the Gunslinger dude - around $31/hr.
-
Mine makes a puny $1/hr. Maybe it's a server at a crappy restaurant in the 90's?
Drat.
Sorry, servers made $2/14/hour back in the 90's. I know, cuz I was one of them!
I'm happy for the 90's you. I'm sad for my soldiers.
-
-$.04 per hour. Cool exercise. My dollars will hopefully be gainfully employed by the end of the year.
-
Right now I have expensive American employee's, which are losing me $0.33 an hour. Going forward I plan to outsource, and every year I plan to give my worker's a $2.45 raise, which means:
In 2015 I will be employing 1 full time Indian employee
In 2016 I will be employing 1 full time Chinese employee
In 2020 I will be employing 1 full time New Zealand employee, or nearly 7 full time Indian employees
and so on and so on..
Quite the little operation I'm setting up. (this was a simplistic take, ignoring compounding. Source: http://en.wikipedia.org/wiki/List_of_countries_by_average_wage)
-
I just did this very mental exercise a month ago while on a walk.
$25/hour (from investments)
$35/hour (investments + pension in 9 years)
$50/hour (all of the above + Soc. Sec. in ~20 years)
Yes, I'm counting some of those chickens before they're hatched, but I consider them very safe so I include them in the future. Add in your own Soc. Security or other future benefits you've already earned/accrued, it might make you feel even richer.
Somewhat similar numbers but only 5 years until the pension . . .
-
Really puts things in perspective when you consider how hard someone else has to work for that kind of cash. I'm not saying I didn't "work hard" to save it, I'm just saying it feels good knowing I will never have to struggle to earn a minimum wage since my stache already does it for me.
That is a fantastic attitude, and also really eye opening about the value of MY time and how I spend it.
-
I'm happy to report my stache employs approximately one full time minimum wage employee. I feel very fortunate to be in this position, particularly considering there are many people trying to get by on a minimum wage salary.
Really puts things in perspective when you consider how hard someone else has to work for that kind of cash. I'm not saying I didn't "work hard" to save it, I'm just saying it feels good knowing I will never have to struggle to earn a minimum wage since my stache already does it for me.
That gratitude is such an awesome attitude, love it.
We are very fortunate, those of us posting on the MMM site, for a number of reasons. Getting this perspective on my stache really helps me appreciate how lucky I am, versus a feeling of it not being enough (which I rarely experience, but understand why one might, in their striving for FIRE).
Completely agree!
-
My main point though is it really doesn't matter if yours is bigger than mine.
Absolutely.
As I've said before, the two most important variables for age when you FIRE seem to be: when you find the concept of ER, and how much financial baggage you have when you do. Some of us were lucky to find it early (and even have it available at the right time), others just didn't run across it or it wasn't really "out there". No big deal.
(Also I'm not at $30+/hour.. yet. :) )
My main point though is it really doesn't matter if yours is bigger than mine. My $7.50 is 1/4 of your $30, but it's > milla's $1, and milla's $1 is > someone else's negative $1, and on and
(Emphasis added.)
Oh man, I didn't think about it the other way, being in debt and paying interest.
Say you're 91k in debt (mix of student loans, car, whatever) at ~7% (what student loans often go for nowadays). That means you're paying 6735 in interest annually. To pay that, you'd need to work half that 1700 hours at minimum wage of 7.50.
Or, in other words, you have to work extra at a part time minimum wage job to make up for that interest*. Yikes.
*Now you may not actually do this, but make enough at your normal job, but the point is just like you can think of your stache as an extra person working an extra job for you, you can think of the interest accruing as you needing to work another job. Ouch.
Ouch. I am a fairly low earner, not terrible, but below 30k and I just did the math. My student loans mean I have to pay back my loans with a $1/hr pay cut. It is a really interesting view of what exactly interest means.
-
Ouch. I am a fairly low earner, not terrible, but below 30k and I just did the math. My student loans mean I have to pay back my loans with a $1/hr pay cut. It is a really interesting view of what exactly interest means.
Sucky now, but sounds like a good source of inspiration!
-
Ouch. I am a fairly low earner, not terrible, but below 30k and I just did the math. My student loans mean I have to pay back my loans with a $1/hr pay cut. It is a really interesting view of what exactly interest means.
Sucky now, but sounds like a good source of inspiration!
It certainly is. My wife and I just started the mustachian journey mid-February, so aren't too bummed about where we are starting, but it is good to keep it in perspective about why our hair should be on fire paying off debt emergencies and why there is no such thing as "good" debt. (At least not until you have the money set aside earning at a higher rate than the interest paid.)
-
My soldiers are apparently crappy '90s waiters who don't earn tips, because they are pulling in $2/hr right now. But, hey, they've gotten a $1/hr raise in the last 6 months, so I can't complain about that :)
-
.54 cents at 1700 hours/year. I got a ways to go but hey! at least I'm making something :)
-
It is also interesting to compare how much they are "earning" (based on 4% SWR) as against how much they are really earning (12 month's ago value compared to today's value less any extra money I have put in) - this actually shows how lazy they are. I think mine are quite productive!
-
It is also interesting to compare how much they are "earning" (based on 4% SWR) as against how much they are really earning (12 month's ago value compared to today's value less any extra money I have put in) - this actually shows how lazy they are. I think mine are quite productive!
Well sure, it's nice looking at that in an up year. Market is up 16% (or real estate ROI was 16%, or whatever), your workers made you 4X as much money!
But think about the down years, when your workers lose you money (and the bigger your portfolio, the more per hour they're losing you). ;)
Since the 4% rule is designed to smooth that out over time, you can use that and then ignore whether your portfolio was up or down, and by how much, to see what your workers would support making you in a typical year. :)
That is fun though. "Whee" I think is the phrase for it.
-
Our invested assets are earning us about $4.89 an hour, and our debts will cost us about $1.72 an hour average over this year (according to my spreadsheet, could be lower if more is paid down on them than I expect right now).
That nets out to about $3.17 an hour earned by our investments. We're moving up!
-
That is fun though. "Whee" I think is the phrase for it.
Yes, if I count 2013 where our soldiers earned about $80/hr because of the 30% gain in the market, I almost visualize them as little hedge fund managers.
-
Kind of like the thread about our amazing world with grocery stores and running water, I think it's pretty incredible to be earning money by doing nothing, no matter what the amount is. If you're earning $0.50/hour right now, it's still pretty incredible that someone would walk up to you and put two quarters in your hand, every single hour, every working day, for doing absolutely nothing. And it just keeps increasing.
Then when you get to the end of your career and your passive investments equal or exceed all the money you need to live every hour, it's truly mind boggling.
-
Kind of like the thread about our amazing world with grocery stores and running water, I think it's pretty incredible to be earning money by doing nothing, no matter what the amount is. If you're earning $0.50/hour right now, it's still pretty incredible that someone would walk up to you and put two quarters in your hand, every single hour, every working day, for doing absolutely nothing. And it just keeps increasing.
Then when you get to the end of your career and your passive investments equal or exceed all the money you need to live every hour, it's truly mind boggling.
It's amazing, but not for doing "nothing". At least most of us had to work for the money we invested, and then had to choose to invest that money in exchange for profits vs spending the money in exchange for goods
-
Kind of like the thread about our amazing world with grocery stores and running water, I think it's pretty incredible to be earning money by doing nothing, no matter what the amount is. If you're earning $0.50/hour right now, it's still pretty incredible that someone would walk up to you and put two quarters in your hand, every single hour, every working day, for doing absolutely nothing. And it just keeps increasing.
Then when you get to the end of your career and your passive investments equal or exceed all the money you need to live every hour, it's truly mind boggling.
It's amazing, but not for doing "nothing". At least most of us had to work for the money we invested, and then had to choose to invest that money in exchange for profits vs spending the money in exchange for goods
True, at least for the amount we invested. But all the compounded gains over the years and continuing passive income is "free"; we don't have to do anything to continue reaping it. I got a 401k statement the other day that showed the total amount, and the portion I contributed over the years -- the amount I put in was something like only 1/3 of the total value! Now I'm not contributing to it any longer, but it continues to go up -- amazing (to me)!
-
Kind of like the thread about our amazing world with grocery stores and running water, I think it's pretty incredible to be earning money by doing nothing, no matter what the amount is. If you're earning $0.50/hour right now, it's still pretty incredible that someone would walk up to you and put two quarters in your hand, every single hour, every working day, for doing absolutely nothing. And it just keeps increasing.
Then when you get to the end of your career and your passive investments equal or exceed all the money you need to live every hour, it's truly mind boggling.
It's amazing, but not for doing "nothing". At least most of us had to work for the money we invested, and then had to choose to invest that money in exchange for profits vs spending the money in exchange for goods
True, at least for the amount we invested. But all the compounded gains over the years and continuing passive income is "free"; we don't have to do anything to continue reaping it. I got a 401k statement the other day that showed the total amount, and the portion I contributed over the years -- the amount I put in was something like only 1/3 of the total value! Now I'm not contributing to it any longer, but it continues to go up -- amazing (to me)!
You don't have to do anything to continue reaping it, but that doesn't make it free. It's delayed compensation for past acts. Would you call a pension after 30 years at a company "free" money?
-
In the original thread I mentioned that every single 1 cent per hour soldier (24 hour day my soldiers work around the clock not just the 40 hours a week I work) costs me $2190 to purchase. That is a hell of a lot of work.
What I find most impressive however isn't the fact that I'm getting X per hour. It's the fact that those little soldiers are busy making more soldiers and not that far down the road they'll be making more soldiers then I am.
I had the idea almost 15 years ago after a day off from work having a mini vacation I sat down and did the math figuring out what I had to have in the bank to give me enough income to not need to work and every day be a mini vacation. I assumed a paid off house and I pulling a number out of my ass 5% returns. At this time I had a decent job, lived with my parents, had a few thousand in the bank and no debt. The number I came up with then is actually very close (within 100k) to my number today. I've added a wife, and kids and financially the only big difference is I now have a house and a decent sized mortgage. Had I acted on that idea back then I'd be done now. Oh well.
-
In the original thread I mentioned that every single 1 cent per hour soldier (24 hour day my soldiers work around the clock not just the 40 hours a week I work) costs me $2190 to purchase. That is a hell of a lot of work.
What I find most impressive however isn't the fact that I'm getting X per hour. It's the fact that those little soldiers are busy making more soldiers and not that far down the road they'll be making more soldiers then I am.
I had the idea almost 15 years ago after a day off from work having a mini vacation I sat down and did the math figuring out what I had to have in the bank to give me enough income to not need to work and every day be a mini vacation. I assumed a paid off house and I pulling a number out of my ass 5% returns. At this time I had a decent job, lived with my parents, had a few thousand in the bank and no debt. The number I came up with then is actually very close (within 100k) to my number today. I've added a wife, and kids and financially the only big difference is I now have a house and a decent sized mortgage. Had I acted on that idea back then I'd be done now. Oh well.
This compounding effect is a reason I think "upgrade" style games like cookie clicker (http://orteil.dashnet.org/cookieclicker/) are great for kids. All you have to do is think a little laterally and realize the same principles apply to real life.
-
holy crap. I played that until I realized that it was pointless many billions of cookies later and never once put together that my initial clicking was like my initial saving. You are correct of course. If they made it more obviously linked to money then it would be even better.
-
holy crap. I played that until I realized that it was pointless many billions of cookies later and never once put together that my initial clicking was like my initial saving. You are correct of course. If they made it more obviously linked to money then it would be even better.
There's a similar game on the iphone (and others?) called "make it rain," where instead of clicking you swipe a stack of dollar bills. Same genre, though.
-
here's a page displaying the same calculation but for Bill Gates stash and updating in realtime.
http://www.salary-money.com/bill-gates-salary-50000000000.php#.U347M3Wx20g
They used 50 billion as his networth. In reality he's in the mid 70's is my understanding.
-
You don't have to do anything to continue reaping it, but that doesn't make it free. It's delayed compensation for past acts. Would you call a pension after 30 years at a company "free" money?
I must not be following you, or maybe we're even saying the same thing. I'm saying that yes, you and I had to work to earn the initial investment, and you're right we gave up buying stuff at the time. But if ten years ago I invested $100k, and it turned into $200k just through compounding over the decade, then it's now producing income that I never earned -- at least, that's how I'm looking at it.
At a 4% SWR, the amount I invested ($100k) would produce $4k/year. The additional $100k that came from compounding would produce another $4k/year. So I'd be getting $8k/year income, but half that came from compounded returns that I didn't have to do a thing to earn (just had to let it sit there).
When you get into even longer time periods, then the compounding really dominates the initial investment (like with my 401k, where compounded returns already exceed my investment 2:1). Once I start withdrawing it more than a decade from now, it will likely be a 5:1 or 6:1 ratio. That snowball effect makes the compounded returns end up dwarfing the amount I put in. So for only investing a little work earnings long ago, we can get a pretty high salary down the road, that could be 5-10x what we put in.
-
It's the triple value of income (http://www.madfientist.com/triple-income-value/). I referenced this last night to my wife, sort of. She was discussing a relatives' purchase of a $65 shirt for a 5 year old, and I told her they had to "earn" $110 to buy that crap after considering income and sales taxes.
Yeah, I think you're both saying roughly the same thing.
It's not unearned. You earned it by deferring your use of it, and by recognizing the power of compound interest, tax deferral, etc.
Yes, your "earnings" are now "earning", but that all came from your initial decision to provide for your future instead of fulfilling an impulse. Don't sell yourself short DoubleDown you earned it! And Dragoncar, you're correct that it's not free, but as DoubleDown points out, it is quite amazing to see the power of compound interest at work.
-
It's the triple value of income (http://www.madfientist.com/triple-income-value/). I referenced this last night to my wife, sort of. She was discussing a relatives' purchase of a $65 shirt for a 5 year old, and I told her they had to "earn" $110 to buy that crap after considering income and sales taxes.
Yeah, I think you're both saying roughly the same thing.
It's not unearned. You earned it by deferring your use of it, and by recognizing the power of compound interest, tax deferral, etc.
Yes, your "earnings" are now "earning", but that all came from your initial decision to provide for your future instead of fulfilling an impulse. Don't sell yourself short DoubleDown you earned it! And Dragoncar, you're correct that it's not free, but as DoubleDown points out, it is quite amazing to see the power of compound interest at work.
That's cool and all, but I'm not seeing why he calls it "triple" value. I also did agree it's amazing.
It's amazing
Anyways, yeah as Cheddar says, it's not money that you never earned. It's money that you previously earned, maybe a long time ago, but not like, today.
-
My apologies dragoncar, you did say it was amazing. That's amazing that I used the same damn word without noticing you used it as well.
I think this quote from the post is why he calls it the triple value of income:
Let’s assume you make $100,000 a year. If you spend everything you earn, your take-home value at the end of the year is roughly $80,000. If you instead put the majority of your income into your retirement, HSA, and investment accounts, you end up getting $263,663 of value out of that salary!
$80,000 * 3 = $240,000, which is close to the $263,663 your salary could be worth by his calculations. Not saying I agree with all the assumptions, but it's a pretty nice exercise in understanding what your earning power is really worth in a spend vs. save calculation.
-
Anyways, yeah as Cheddar says, it's not money that you never earned. It's money that you previously earned, maybe a long time ago, but not like, today.
You guys are just seeing this different ways. He's saying if you earn $100 and it compounds to $1000, 900 of it is "free," and that you earned only $100. You're saying that you earned all $1000.
-
Anyways, yeah as Cheddar says, it's not money that you never earned. It's money that you previously earned, maybe a long time ago, but not like, today.
You guys are just seeing this different ways. He's saying if you earn $100 and it compounds to $1000, 900 of it is "free," and that you earned only $100. You're saying that you earned all $1000.
Yes. It's not like I just found some money on the ground, it's a result of effort. When I work for two weeks (one pay period) and then get paid a week later, I don't say "hey, I just got free money because I'm on vacation TODAY." When I put money in the stock market, I am buying future returns for the price of opportunity, or the other stuff I could do with that cash. It's cool that I can do that, but it's not like I just found fifteen gold coins in a chest in the middle of the woods.
-
Oh to be young and carrying student loan debt and a mortgage. I end up paying $3.33 every working hour in interest on my outstanding debt. If I sold my home, paid off the debt and invested the rest I'd be earning $0.47 an hour though.
-
I love this exercise! My stash is earning me ~$1/hour at present.
-
I have some Seal team six dollars in my trading account. Yesterday I bought a stock at $2.58 and today sold it for $2.88, 20,000 shares, $6000 in a span of 22 hours.
$272 an hour soldiers. God bless our money military.
-
Anyways, yeah as Cheddar says, it's not money that you never earned. It's money that you previously earned, maybe a long time ago, but not like, today.
You guys are just seeing this different ways. He's saying if you earn $100 and it compounds to $1000, 900 of it is "free," and that you earned only $100. You're saying that you earned all $1000.
Yes. It's not like I just found some money on the ground, it's a result of effort. When I work for two weeks (one pay period) and then get paid a week later, I don't say "hey, I just got free money because I'm on vacation TODAY." When I put money in the stock market, I am buying future returns for the price of opportunity, or the other stuff I could do with that cash. It's cool that I can do that, but it's not like I just found fifteen gold coins in a chest in the middle of the woods.
Agreed.
But the actual amount you "earned" (nominal dollars) is just the 100.
You're getting extra money by taking it later, due to the time value of money and investing it, and that's what DoubleDown is saying.
He's calling that extra money that came from waiting "free."
You apparently don't understand that point of view, and that's okay. :)
I see what both of you are saying.
It's pretty neat, that you can just wait to get payment and you get paid what you were owed plus a bunch extra. Whether you view that extra as earned, or not.
-
$2.94/ hour liquid portfolio
$5.60/hour networth portfolio
2 person portfolio though.
Still have a ways to go but the progress has been speeding up.
-
Anyways, yeah as Cheddar says, it's not money that you never earned. It's money that you previously earned, maybe a long time ago, but not like, today.
You guys are just seeing this different ways. He's saying if you earn $100 and it compounds to $1000, 900 of it is "free," and that you earned only $100. You're saying that you earned all $1000.
Yes. It's not like I just found some money on the ground, it's a result of effort. When I work for two weeks (one pay period) and then get paid a week later, I don't say "hey, I just got free money because I'm on vacation TODAY." When I put money in the stock market, I am buying future returns for the price of opportunity, or the other stuff I could do with that cash. It's cool that I can do that, but it's not like I just found fifteen gold coins in a chest in the middle of the woods.
Agreed.
But the actual amount you "earned" (nominal dollars) is just the 100.
You're getting extra money by taking it later, due to the time value of money and investing it, and that's what DoubleDown is saying.
He's calling that extra money that came from waiting "free."
You apparently don't understand that point of view, and that's okay. :)
I see what both of you are saying.
It's pretty neat, that you can just wait to get payment and you get paid what you were owed plus a bunch extra. Whether you view that extra as earned, or not.
I understand it, but I don't agree with it. Free is not the correct word. I want to know if pension money is considered "free"
-
I understand it, but I don't agree with it. Free is not the correct word. I want to know if pension money is considered "free"
It's fine that you don't agree. Others see it differently than you.
And yes, under that thinking, some of that pension may be "free".
Some of it is deferred compensation, some of it is earnings on that deferred compensation.
If you and your employer contributed $100k total to your pension fund and the value of it 30 years later is 900k, then you could say that 100k of it was earned, 900k was "free."
It's not "free" under the way you want to use free, but I can see where he's coming from. It's certainly not earned money. It's money that comes from waiting to take the compensation, and taking it later, due to investing and the time value of money.
Earned money + unearned investment income = total.
You want to say it's all earned (including the unearned part - it's not earned though). He wants to say the unearned part is free (it's not free though).
Neither of you is 'right,' per se, just using different definitions and meanings.
-
I understand it, but I don't agree with it. Free is not the correct word. I want to know if pension money is considered "free"
It's fine that you don't agree. Others see it differently than you.
And yes, under that thinking, some of that pension may be "free".
Some of it is deferred compensation, some of it is earnings on that deferred compensation.
If you and your employer contributed $100k total to your pension fund and the value of it 30 years later is 900k, then you could say that 100k of it was earned, 900k was "free."
It's not "free" under the way you want to use free, but I can see where he's coming from. It's certainly not earned money. It's money that comes from waiting to take the compensation, and taking it later, due to investing and the time value of money.
Earned money + unearned investment income = total.
You want to say it's all earned (including the unearned part - it's not earned though). He wants to say the unearned part is free (it's not free though).
Neither of you is 'right,' per se, just using different definitions and meanings.
Yeah except I'm using the correct definition ;-)
-
We have anthropomorphized our dollars as soldiers; as per the OP. Without those first 100 soldiers (that YOU earn) they would not earn more soldiers for YOU. Technically it is not YOU that earns the next 900. The soldiers are the ones doing the earning. Those first 100 soldiers are putting in the hard work to recruit soldiers at a certain rate. As more soldiers are recruited - they too are employed in the recruitment drive.
You might think those next 900 soldiers are 'free', but they most certainly are not! Those soldiers are laying their lives on the line for you! (The USA did not acquire its freedom for free!). Soon they will form an army.
Although you have some say in the strategy the soldiers employ, frequently you don't really know what they are up to. Some regiments (even divisions) make poor choices and do their own thing. Sometimes they die. Those are your anguished screams when they do. Some regiments make excellent choices and go on a recruiting spree. That's you giggling when they do.
I'm off to check on my army now...
-
I understand it, but I don't agree with it. Free is not the correct word. I want to know if pension money is considered "free"
It's fine that you don't agree. Others see it differently than you.
And yes, under that thinking, some of that pension may be "free".
Some of it is deferred compensation, some of it is earnings on that deferred compensation.
If you and your employer contributed $100k total to your pension fund and the value of it 30 years later is 900k, then you could say that 100k of it was earned, 900k was "free."
It's not "free" under the way you want to use free, but I can see where he's coming from. It's certainly not earned money. It's money that comes from waiting to take the compensation, and taking it later, due to investing and the time value of money.
Earned money + unearned investment income = total.
You want to say it's all earned (including the unearned part - it's not earned though). He wants to say the unearned part is free (it's not free though).
Neither of you is 'right,' per se, just using different definitions and meanings.
Yeah except I'm using the correct definition ;-)
If you say so.
The IRS doesn't agree, and calls those extra earnings something else depending on the investment - capital gains, for example, is a common name for them. But your wanting to call them "earned" is no more correct, IMO, then him wanting to call them "free."
I can see why one would call them either one (you "earned" them by waiting to take it and investing, they're "free" because they came not directly from labor but something else), but I don't agree with either definition, but I'm fine with someone else using either one if it makes them happy.
Feel free to be just as wrong, in a different way though. :)
-
If there's one thing this thread has demonstrated, it's that I'm right and dragoncar is wrong.
Kidding! And dragoncar is still amazing.
-
4 cents an hour... Yep... $0.04 per hour!!! At least it's no longer negative!!!!!!!!!!!!!
I gotcha beat! Mine are making a whopping $0.027/hr :) But like you said, at least it's not negative... and it will be going up steadily from here! I can't wait to play this game again in 6 months.
-
This thread has inspired me to add a new row to my portfolio tracking spreadsheet's summary page: Hourly Wage.
For mine, I'm using 1950 hours/year, as that is how my employer calculates my rate, though 4 weeks of that are vacation. As of this week, that number is $0.04/hr, but that's 4x what it was the week before! :)
-
You're assuming that 4% is a hard and fast rate. I earn quite a bit more than 4% by trading options.
Standard # of hours calculating an hourly rate is 2080.
-
You're assuming that 4% is a hard and fast rate. I earn quite a bit more than 4% by trading options.
Standard # of hours calculating an hourly rate is 2080.
Both of these assumptions have been explained upthread.
Use whatever assumptions you want. :)
-
Drat, 4000 of my soldiers got drafted by Uncle Sam.
#$%@ estimated tax payments.
-
This whole conversation about our soldiers reminds me of that exchange between the Cdr. and XO on Battlestar Galactica..."We have to start making babies."
Soldiers making babies makes for badass babies!
-
I started late.....one of those who wishes he knew then, what he knows now
But my DW and I have made good strides in the last 15 years
In the year 2000, our answer would have been pennies
Today, our answer is around $ 24.00 and hour
We have another 7 years or so with me working, and 4 for her.....we will add considerably to that number during that time
If we count our debt we had in 2000, we were way in the negative....so feeling much better now
-
$5.80 per hour. My soldiers could use a promotion.
-
Currently well under a dollar. We're working on recruitment presently.
-
Having a small stash, I find it less depressing to figure out how many minimum-wage hours my soldier is working for me.
4% of stash divided by min. wage in NY divided by 52 weeks = 14.5
So having my stash is roughly the equivalent of picking up a minimum wage shift both days of the weekend. I'm so productive!
Maybe this magnifies swings in value too much. Last month it was only the equivalent of 14 hours worth.
-
Having a small stash, I find it less depressing to figure out how many minimum-wage hours my soldier is working for me.
4% of stash divided by min. wage in NY divided by 52 weeks = 14.5
So having my stash is roughly the equivalent of picking up a minimum wage shift both days of the weekend. I'm so productive!
Maybe this magnifies swings in value too much. Last month it was only the equivalent of 14 hours worth.
I like this too, but I would have thought your stache would have been medium sized and fluffy.
-
Many of these points get to what I like to call "The Rule of 300". 300 * a monthly rate gives you the stache required to support and large chunk of money / 300 gives you monthly rate. It's a great way to think about things like cell phones as someone already posted.
I have done this exercise before, but do my math a little differently. I assume a 40-hour work week, so (365/7)*40 = 2085 working hours (my soldiers don't get federal holidays off.
That being said, my workers get $12.50 an hour which I'm happy with for now. With my contribution rate, they're getting a 20 cent raise each month!
Another question: What will your soldiers be making when you hit your FIRE number? Mine will be making about $45/hour so I've got a ways to go.
-
Having a small stash, I find it less depressing to figure out how many minimum-wage hours my soldier is working for me.
4% of stash divided by min. wage in NY divided by 52 weeks = 14.5
So having my stash is roughly the equivalent of picking up a minimum wage shift both days of the weekend. I'm so productive!
Maybe this magnifies swings in value too much. Last month it was only the equivalent of 14 hours worth.
I like this too, but I would have thought your stache would have been medium sized and fluffy.
Unless you accidentally put it in the dryer; then it shrinks.
-
Many of these points get to what I like to call "The Rule of 300". 300 * a monthly rate gives you the stache required to support and large chunk of money / 300 gives you monthly rate. It's a great way to think about things like cell phones as someone already posted.
I think in multiples of 300 all the time. It is an easy way to put my savings/spending priorities into focus. Do I want to buy a bed for the guest room or do I want to craigslist a free one and keep $1/month every month for the REST OF MY LIFE? A new kayak, or $3/month every month for the REST OF MY LIFE? Week long international vacation or $5/month every month for the REST OF MY LIFE?
-
I think in multiples of 300 all the time. It is an easy way to put my savings/spending priorities into focus. Do I want to buy a bed for the guest room or do I want to craigslist a free one and keep $1/month every month for the REST OF MY LIFE? A new kayak, or $3/month every month for the REST OF MY LIFE? Week long international vacation or $5/month every month for the REST OF MY LIFE?
I do this too! I got a bonus this month that will net me ~$3000 after taxes. I put that in my spreadsheet as netting me $10 bucks a month for the rest of my life. I like the "additive" method, when every chunk you put into savings nets more into post-retirement income.
Say your goal is $2000/month in retirement. Every chunk you put in adds some money and gets you closer!
-
What a second..
So I put some soldiers to work for me.. The recruit more soldiers to work for me, but I get the benefit of it not the soldiers.. These new soldieries recruit new soldiers who also work for me..
This is a pyramid scheme!!!
(on that note: I'm somewhere about where I was when I worked in the kitchen of a 7th day adventist nursing home in high school... the work wasn't pretty, but it was something).
-
Today, our answer is around $ 24.00 and hour
We have another 7 years or so with me working, and 4 for her.....we will add considerably to that number during that time
If you don't mind me asking: Since you're already at $24/hr, do you really think it will take another 7 and 4 years working for you and your spouse to retire? Depending on your expected expenses of course, I'd think you've already reached a "middle class" retirement amount.
Another question: What will your soldiers be making when you hit your FIRE number? Mine will be making about $45/hour so I've got a ways to go.
Similar question as above -- are you shooting for a pretty high standard of living in retirement?
In both cases, I'm not criticizing or second-guessing, I'm just curious about your goals or assumptions. I'm also at $45/hr as well, but I almost fell into that by accident saving for a typical, late age retirement before drinking the MMM kool-aid.
-
What a second..
So I put some soldiers to work for me.. The recruit more soldiers to work for me, but I get the benefit of it not the soldiers.. These new soldieries recruit new soldiers who also work for me..
This is a pyramid scheme!!!
(on that note: I'm somewhere about where I was when I worked in the kitchen of a 7th day adventist nursing home in high school... the work wasn't pretty, but it was something).
It's an upside-down pyramid, though, because each soldier recruits a fraction of a soldier.
-
Today, our answer is around $ 24.00 and hour
We have another 7 years or so with me working, and 4 for her.....we will add considerably to that number during that time
If you don't mind me asking: Since you're already at $24/hr, do you really think it will take another 7 and 4 years working for you and your spouse to retire? Depending on your expected expenses of course, I'd think you've already reached a "middle class" retirement amount.
Another question: What will your soldiers be making when you hit your FIRE number? Mine will be making about $45/hour so I've got a ways to go.
Similar question as above -- are you shooting for a pretty high standard of living in retirement?
In both cases, I'm not criticizing or second-guessing, I'm just curious about your goals or assumptions. I'm also at $45/hr as well, but I almost fell into that by accident saving for a typical, late age retirement before drinking the MMM kool-aid.
we are being overly cautious.....
i for one, dont believe social security will continue at it's current rates and retirement ages
we want a total income of $ 7000 month.....but neither have any pensions that will be coming
so it is our accounts, and whatever we actually get from the SSA
based on latest sheets we have, our SSA at those points will be around $ 3600-3700 mo
depending on how much they take for medicare, we figure $ 3000 net approx
so we are trying to get to $ 4000 mo from our investments
at least this is how we see things right now, and why we have planned things the way we have
-
I make minimum wage in the off season, while I'm going to school, commission based otherwise.
The upside which I felt was more important is
-The work environment is completely stress free
-Great mentor-ship on the owner's behalf.
-15-20 Minute walk from my house.
-Incredibly Supportive Co-workers, who want me to excel in my career.
After seeing people complain about their jobs, despite being paid more, even if I make less than most people my age, I'm completely happy working there.
-
Another question: What will your soldiers be making when you hit your FIRE number? Mine will be making about $45/hour so I've got a ways to go.
Similar question as above -- are you shooting for a pretty high standard of living in retirement?
In both cases, I'm not criticizing or second-guessing, I'm just curious about your goals or assumptions. I'm also at $45/hr as well, but I almost fell into that by accident saving for a typical, late age retirement before drinking the MMM kool-aid.
DoubleDown,
The short answer is yes - I want to live a more rich/lavish lifestyle down the road and have more flexibility. My wife and I have completely bought into the MMM way of life for wealth accumulation, but we would rather work a little longer to FIRE with more money.
We are looking at a lot of voluntary expenses in "retirement". I put this in another post, but my wife plays polo which might be up to $1k a month (but is free for now because of the work she does for the polo group). Not only that, but I have a great job. My job is software development for a bunch of PhD's trying to solve hard problems in the cloud. It's a fun, energetic place to work; I can work whenever and wherever I want, bike to work, and work voluntary overtime for extra pay if I want. It's a 9 out of 10 on my dream job scale and I enjoy it every day. I have enough time to pursue side projects without much trouble as it is, so I don't see a reason to quit working.
I also have a higher number because I have a $700k mortgage I have no desire to pay off early. I'm less than a year in and the payments are $3,830. I could pay it off in full right now, but then I have less money working for me in the market. I feel pretty confident I can earn 3.75% + inflation in the stock market on average over time. I also like having more balanced debt to equity to protect against increased inflation. So, I want my FIRE number to be able to support this payment on top of everything else. I might pay it off in full around the 20 year point, once my compounding has fully kicked in and I'm mainly paying principal anyway, but not yet.
We also like to travel a lot.
So, basic living costs in a high cost of living area + high mortgage + expensive hobby + travel = high FIRE number.
All that being said... MMM has allowed us make all these decisions with our eyes open. We could sell our house, move to another area, and FIRE tomorrow at age 30. Knowing that we have that option is incredibly refreshing and allows us to sleep well at night. The other option is we continue what we're doing... we keep working in jobs that we enjoy and keep saving to add to our buffer and add to our ability to partake in some of the more expensive hobbies we have. We're able to put away over $100k a year right now into investments, so it's adding up very rapidly. If we have kids or life situations change we might throttle this back, but for now it's working out pretty well for us.
-
My soldiers are all of doing various things.
The main battalion is leased out, locked up by some pension fund slave driver, pulling in around 8% per annum. (p.a.).I ddon't really know what they do with them, because they are on a fixed rate guarantee contract. I get the 8% always.
I have a crew out working the plantations, growing crops for around 9% p.a.
Another battalion is deployed throughout the USA and overseas working in companies and businesses, and they had a cracking year last year, racking in over 20%.
And then I have a couple of reserve battalions who are loaned out to reputable banks, companies and the US Government. They have it pretty easy, safe behind the lines, but are barely pulling in 2% right now. Little do they know they are about to be put to work rebuilding houses for hopefully more than 12% p.a. But they are ready to be deployed at a moments notice, all crisp and marching in stacks. They may not be doing much now, but they do protect the significant other at night especially, and when they march in those tidy columns it impresses the hell out of real estate agents, so, no they aren't a total loss.
by Arebelspy's method, 4% and 1700, our little green workers are pulling in 3 minimum wage jobs worth.
I prefer to think of actual returns and 2000 hrs, so they are earning me $42 an hour. Once I get some more reserves into the trenches of real estate and rentals, I expect to get that up to over $50 an hour.
Sweet way to think about it. Plus they probably pay less tax than the minimum wage workers would.... hmmmm...
-
My soldiers are hard workers making $25.88 an hour. Their pay is rising quickly and needs to nearly double. We are still spending way too much to live on $25.88 an hour.
-
Based on the 1700 hours calculation, my retirement account soldiers are making $0.87/hr (as of the end of Q1) which is up from $0.85/hr at the beginning of the year. Personally, I prefer to use 2000 hours since I'm not one for taking unpaid days off of work. Under these calculations, my soldiers earn $0.74/hr.
I expect this to improve by the end of the year as I have finally gotten a job as an accountant instead of being unemployed (but working on my Accounting BS). I'm temp-to-hire but my boss has already said that she's very happy with my work and she's just waiting for the temp contract to run out.
-
Just read this on arebelspy's 'not diary'. What a great idea.
I've done mind differently as my 'stache is invested in property so I've done it on net rental income, after mortgages and taxes. Works out to £6.17 an hour, around $9.19 so I have around one and a quarter people working for me and giving me all their take home pay. Sweet :)
-
Hmm! Add another $10/ hr to my income! Interesting way of looking at this.
(I divided by 2080, because that is the number of hours exempt employees get paid for each year, so the jump in my own pay seems most relevant to me.)
-
Apparently, using your formula and 2000 hours, I am employing one techie Bro-grammer who's getting paid $56/hour. He's getting paid more than I do at my (soon-to-be former) job.
Maybe he'll help me with my website. :-)
-
Using 1700 hours I am at $15.30/hr or 30 cents more per hour than what fast food workers are protesting to earn. Of course my workers get regular pay increases :)
-
[snip]
-
Using 1700 hours but a 7% avg. ROR my hard workers are making only about $3/hr for me. Thankfully their living expenses (MER) are extremely low and they are saving everything they make.
They also have little connection to my pension, which does its own thing. I don't really have a number for that guy and what he is up to, but he is probably bigger than my army of soldiers and grows faster (my workplace has a mandatory 8.1% contribution and a 9.5% matching contribution, which means 17.6% of my gross income every paycheck going into Mr. Pension's private army). The latest annual report says he is doing fairly well at least (as one would hope for that kind of contribution).
-
.35 cents an hour! LOL. Hey, it's .35 cents more an hour than it was 7 months ago! Stash size = 15k, which I'm super proud of!
Up to .90 cents an hour but it feels like im being taxed more than that now, lol.
-
Our invested assets are earning us about $4.89 an hour, and our debts will cost us about $1.72 an hour average over this year (according to my spreadsheet, could be lower if more is paid down on them than I expect right now).
That nets out to about $3.17 an hour earned by our investments. We're moving up!
Almost a year later and by the same calculation we have a net $4.25 earned by investments.
Getting closer to a minimum wage employee for 1,700 hours a year!
-
My 'stache is unemployed 11 months out of the year.
lol, you and me both. :( I'm at a whopping 82 cents an hour!
All in good time, I suppose.
-
Another thing to think about is that $30,000 cell phone you are carrying around.
$100 a month phone contract is $1200 a year which takes a stache of $30,000 to support @4% SWR.
I have the $3,000 Republic phone. But I do anticipate that in just a few years that cell phone rates will pretty much go the way of TV --- free with some ads and pricier for all the bells and whistles.
I'm not sure why Republic doesn't do ads now?
-
Hehe.
Fun one.
Based on 1700 hours and 4% my little liquid army is pulling in a massive $8.38 an hour….
7 years ago various financial institution were charging me $15 an hour in interest rates. While my liquid soldiers were pulling in only $4 and hour.
Those days of paying out are pretty much gone…
-
$0.63 an hour.
My soldiers have a lot more battles to win before they can retire comfortably.
-
My stash is currently earning $0.51/hr for me. And climbing quickly (on track for $0.79/hr by 2016)!
This is a fun game!
-
Replying to this to follow and bump the thread because I enjoy it and want to hear more stories about people's soldiers.
-
Almost at minimum wage! I'll get there, and hopefully well beyond it, next year! :D
-
'm going to cheat a little, looks like the rental is going to net 8000 this year barring catastrophe, not totally passive since I've been over three times for repairs (and I like to make more than my soldier) so total using the stash formula plus the rental I got a guy making $9.39 an hour. Dh got a soldier laying around that should be making almost $4 an hour, but that is a whole ......other topic there.. Holy shit-on a 24/7 basis, I'm making $1.25 an hour
-
About $.04/hr if I don't count my 63K in student loans *sighs* I'll get there eventually.
-
"Based on 1700 hours and 4% my little liquid army"... is up to 3.84 people if you use the minimum wage in my province.
Gotta buckle down and give that last poor little sucker his 0.16 of a body.. he must be hobbling to work.
-
Fun and inspiring thread!
Based on investments only: $5.29/hour
Based on investments plus current pension: $12.11/hour
Based on total net worth: $19.34/hour
-
Neat way of looking at it.
Using 1950 hrs, since that is the base number of hours I get paid a year, 4% and using my no-house/pension net worth, my soldiers are getting a quarter an hour. Which is better than the negative amount they were making 6 months ago.
-
I'll add my own assumption in that working hours per year are 52 weeks * 38 hours per week for a total of 1976 hours per year. I'm using that because that is what I am paid for in my job. Based on that and a 4% WR my soldiers are earning $5.78 AUD per hour. That works out like earning $219 per week which could pay about our grocery bill each week for a family of 5.
I'm actually pretty happy with that.
-
Awesome thread that's worth reviving! My soldiers are from several branches of the military it seems and generating $18 an hour, but meanwhile back in Washington...
My liquid Special Ops soldiers are actively "advising" their way in "AFIREstan", "FIREya" and "FIREaq" at $13 an hour.
My home-equity National Guard soliders are about to free up $5 an hour in mortgage expenses.
But according to the Office of Management and Budget, the White House says my soldiers are all generating $48 an hour (based on net worth at 7% income per annum). So, Congress has decided to use that fictional income level plus assumed increases in the hourly income levels of the next 5 years to justify a $100 per hour spending level now! ;-)
-
Having a small stash, I find it less depressing to figure out how many minimum-wage hours my soldier is working for me.
I did that, too. Mine is roughly equivalent to a summer job at this point. But that's something.
-
Using net worth, $7.45.
Using actual returns (2 rentals) $10.25
I like this thread. What a great way of looking at it.
-
Fun thread! Especially as mine works out to a minimum wage worker which is amazing to me conceptually. It's not nearly enough of course, but wow!
-
I don't have a soldier. I have one sailor. Like I used to do, he goes out to sea on a submarine, and he spends all his time there, so he's happy to send me his income. The thing is, sometimes they're on station for a while, and he doesn't send me anything, so you can't always count on his checks, but ultimately he always comes through. He's been slowly rising in the ranks. He's a lieutenant (junior grade) now. Just got his fish.
-
$25/hr for cash and investments....nice!
-
This was a really fun way to look at it. I'm happy that I currently have 1.5 minimum wage workers and I need 4 to retire. I only used my investment cash in the calculation though and not total NW since I plan to stay in my house when I retire. With my savings rate I should be on track to reach my goal in 6 years.
-
Fun exercise. My little green dudes are currently paid $3.77/hr. Sadly, my 'stache will have to increase 12-fold in order to be paid more than I'm making now. Someday...
-
About $200 a week. Up from under $50 a week a year ago. I'd say that's pretty good.
I am using the following formula..
((Stash) * .07) / 52
-
I'm at 7 cents an hour, using the 2080 hours. But this is only after a few months, and excludes the money I'm saving for a house down payment. This is a cool way to think about it though, I look forward to watching my number grow.
-
Mine is employing a minimum wage earner for 15 hours/week (I like to phrase it that way better) Their hours were cut a bit between last June and now, but they'll get up to full time some time soon!
-
Investments are about $5 per hour. I'll take it.
-
How am I only just now finding this thread!?
Numbers are based on 1/3 of my net worth being in rental property that yields more than 4%, so not really using the SWR but rather total income generated by stash. Divided by 2000.
My little green soldiers are earning me $19.80 per hour.
Sure puts things into perspective as I'm considering getting a minimum wage job for fun. I think, wait no I know, my time would generate a higher ROI by focusing on lead generation for my business (real estate). For instance I'm about to be paid $600 for referring a client to another agent. Didn't do a single lick of work except match the two of them up and I'm getting paid for that. I'd have to work 65 hours at minimum wage to earn that...
-
I'm sad, I make less than a $1/hr.
-
I'm guessing a bit because I couldn't figure out my dividend income for last year on one 401k website, so I just assumed it made about the same per $1000 invested. Close enough.
Farm and Rental income are going forward as they came online partway thru the year. So this is 2016's wages until more soldiers get recruited.
I think I'll have to do a mandatory distribution on my mom's IRA that I inherited. I'll count that money (less dividends) only if the value of the IRA stays constant or goes up. Otherwise I'll treat it as using up capital. I'll find out from my accountant later this year, when I send in my tax info for last year.
I didn't count any real estate or stock appreciation in value because that's just funny money until the stuff is sold. I can't pay the bills with appreciation. Rounded for simplicity:
Amt Hourly Wage
Rental 1&2 9600 5.65
Farm 20000 11.76
Dividends/Interest 11310 6.65
=========================================
Total Passive Income 40910 24.06
When Rental #3 goes online this year, that will be another $2.82 / hour raise. Woot!
I'm hoping to get Rental #4 bought and online by the end of the year for another $2.82 / hour raise.
-
I'm guessing a bit because I couldn't figure out my dividend income for last year on one 401k website, so I just assumed it made about the same per $1000 invested. Close enough.
Farm and Rental income are going forward as they came online partway thru the year. So this is 2016's wages until more soldiers get recruited.
I think I'll have to do a mandatory distribution on my mom's IRA that I inherited. I'll count that money (less dividends) only if the value of the IRA stays constant or goes up. Otherwise I'll treat it as using up capital. I'll find out from my accountant later this year, when I send in my tax info for last year.
I didn't count any real estate or stock appreciation in value because that's just funny money until the stuff is sold. I can't pay the bills with appreciation. Rounded for simplicity:
Amt Hourly Wage
Rental 1&2 9600 5.65
Farm 20000 11.76
Dividends/Interest 11310 6.65
=========================================
Total Passive Income 40910 24.06
When Rental #3 goes online this year, that will be another $2.82 / hour raise. Woot!
I'm hoping to get Rental #4 bought and online by the end of the year for another $2.82 / hour raise.
If you don't mind me asking, what are you doing to get that much passive farm income? Leasing it out for cattle or crops? Hay?
-
Farm 20000 11.76
If you don't mind me asking, what are you doing to get that much passive farm income? Leasing it out for cattle or crops? Hay?
I can't take any credit for this one. I inherited part of two farms from my mom. Her siblings own the rest of the farms. My uncle allows someone else to farm it (they grow rice and soybeans mostly) and the income is my share.
My uncle knows what he's doing and he's been training his son and grandson to take over one day. They are both pretty darn smart, too, so I'm not worried about the arrangement at all.
-
Farm 20000 11.76
If you don't mind me asking, what are you doing to get that much passive farm income? Leasing it out for cattle or crops? Hay?
I can't take any credit for this one. I inherited part of two farms from my mom. Her siblings own the rest of the farms. My uncle allows someone else to farm it (they grow rice and soybeans mostly) and the income is my share.
My uncle knows what he's doing and he's been training his son and grandson to take over one day. They are both pretty darn smart, too, so I'm not worried about the arrangement at all.
Sounds like a good deal for you!
-
(http://bloguin.com/metstradamus/wp-content/uploads/sites/105/2014/04/Tree-Fiddy-300x188.jpg)
In canadian dollars :(
2,50$ us...!
-
$38,000 * 0.04 = $1,520 / 1700 = 0.89 cents an hour
I am 3.8% towards my goal though.
-
Right about minimum wage. Pretty cool!
-
$17.37/hr, based on the standard of 7.25 hrs/day in my last job.
-
$11.53 per hour as a full time salaried employee (2080 hours per year)
$14.11 as a true hourly laborer (1700 hours per year)
Would like my soldiers to advance a bit.
Love this exercise, so if they market would hold out I could just do nothing and make $11.53 an hour. Nice!
-
MMM commented in a blog post years back how you get to the point where your investments turn your life into a treadmill that actually propels you forward, rather than pushing you back. I think this thread does a spot-on job of illustrating why that is so true.
If you look at my net worth, my soldiers produce 6.16 new soldiers for me every working hour. With my current pension value included, that becomes 8.64 soldiers.
As my net worth has recently spiked since being exposed to MMM principals, I'm just starting to feel like I'm getting propelled forward. This makes sense, considering I now have a person working a full-time minimum wage job for me. And the worker even gets not one, but two types of raises...the raise my worker earns on it's own even if I stopped saving, plus the bonuses I'm constantly giving it each time I place money into a 403, IRA, pay down mortgage principal, etc.
But the propelling goes beyond the finances. Your confidence in the future increases, which paradoxically makes it easier to live in the present. It increases your propensity and ability for generosity, which improves your relationships, which all increases your happiness. All that seems like a much better use of funds than eating out all the time, television, etc.
-
Interesting concept. Dont know how much my soldiers earn/hour.
Much of my reading on this forums has revealed how little I know about my financial health.
As I do my taxes I am going to find out this info. Adding this comment, to remind me of this goal.
-
Interesting concept. Dont know how much my soldiers earn/hour.
Much of my reading on this forums has revealed how little I know about my financial health.
As I do my taxes I am going to find out this info. Adding this comment, to remind me of this goal.
A lot of these metrics are useless, but fun.
I don't think this is something pretty much any of us would have known but for calculating it because of this thread (a rare few who thought of the idea, but it's not like a common metric or anything). :)
-
I love this!
My stache is currently earning a mere $3.05 an hour. If I include my equity (ie my whole net worth), it almost employs one minimum wage worker ($7.50) an hour. It's a great way to judge both how much you've saved and what's worth your time in retirement.
-
$35/hr investments only
-
Apropos....
""Here's how I think of my money - as soldiers - I send them out to war everyday. I want them to take prisoners and come home, so there's more of them. Kevin O'Leary""
-
$1.79 per hour....not even mininum wage...lol...but I am noticing it is growing slowly.
-
Hey! This is fun.
+/- $100k * .04 = 4000
4000/1700 = $2.35/hr.
-
I sent 10,000 of my soldiers off to defend oil back in 2014 and only 1,000 of them returned. It is bloody out there.
-
Make sure you don't gamble their lives away by putting them into extra risky situations! :)
-
I sent 10,000 of my soldiers off to defend oil back in 2014 and only 1,000 of them returned. It is bloody out there.
I did almost the same, $10,700, I was up 30% and then watched it drop to about $1,960 today.
My little soldiers procure almost 6 times that oil loss every year in dividends and interest.
$28.91 an hour. Quite a bit more that I earn at my job.
EDIT to correct a mental lapse.
I thought I bought 1000 shares when I really only bought 100.
So, it was $1,070 dropped to $196.
You should have seen my smile when I sold, and found I only lost $800,
and not $8,000. :-)
-
I sent 1000 soldiers on an expeditionary force, leaving behind the strength and solidarity of the Index Funds.
They've... they've been slaughtered, almost a 50% casualty rate since purchase. It is a horrible sight to see.
On the other hand, the bulk of my forces are diligently churning out more reinforcements, bracing to weather the storm that will eventually come.
-
.35 cents an hour! LOL. Hey, it's .35 cents more an hour than it was 7 months ago! Stash size = 15k, which I'm super proud of!
Up to .90 cents an hour but it feels like im being taxed more than that now, lol.
$1.90 now!
-
This was a really fun way to look at it. I'm happy that I currently have 1.5 minimum wage workers and I need 4 to retire. I only used my investment cash in the calculation though and not total NW since I plan to stay in my house when I retire. With my savings rate I should be on track to reach my goal in 6 years.
Glad this came up again so I could compare the numbers. I'm now at 2 minimum wage workers ($15.05/hr). It didn't seem like a very big jump to me, but then I played with the math and it takes $100K to generate $2.35/hr so that means my assets went up ~$175K to achieve that. This is an estimate because I didn't put the exact amount in the original post. MINT is a bit hard sometimes when you have lots of accounts and things get moved around, but it correlates this data pretty closely at saying in that general time frame NW increased by $190K. I do enjoy having various ways to crunch the numbers I think it keeps things exciting and shows you how important it is to keep your eye on the prize.
-
$4/hr. Not counting home equity as part of net worth for this purpose.
-
I'm up to $2.87/hr.
-
$35/hr investments only
Dang Northwestie, you one upped me, I'm just over $32, I didn't include an HSA acount but it's not earning much. I didn't use 4%, I used what I'm actually earning in dividends/interest now. VTSAX is about 2% so that brings things down, but I have some REIT prefereds that bring it up some.
I'm also older, time brings a larger stache.
EDIT: I noticed I posted in this about a year ago, I see I gained $3 more an hour than a year ago.
On the downside I must have lost some memory cells, I don't remember posting that!
-
So I do this, but in a different way. M-F I play a game called "Who's making more, me or my money?" Essentially as I am heavily indexed, I take a market ETF as my barometer. If the market moves above a certain %, my money is working harder, since its daily increase is greater than what I earned at my job that day. On days when dividends are paid, generally my money is working harder.
Note, I'm really only considering money in the market as my working money... other assets I don't count (cash, home, etc.)
I love playing this game for those days when I really feel like I busted my ass all day at work, only to find out my money beat me 10 fold! :)
-
I'll play.
At 1700 hours, they are making $7.53.
At 2080 hours, they are making $6.15.
10 months ago when I started my journal and actually stared tracking they were making $5.03 (1700) and $4.12 (2080). They have earned a 50% raise :)
-
Based on the 1700 hours calculation, my retirement account soldiers are making $0.87/hr (as of the end of Q1) which is up from $0.85/hr at the beginning of the year. Personally, I prefer to use 2000 hours since I'm not one for taking unpaid days off of work. Under these calculations, my soldiers earn $0.74/hr.
I expect this to improve by the end of the year as I have finally gotten a job as an accountant instead of being unemployed (but working on my Accounting BS). I'm temp-to-hire but my boss has already said that she's very happy with my work and she's just waiting for the temp contract to run out.
Roughly three years later, I'm up to $2.20/hr based on the 2,000 hour math. That's up from $1.79 at the end of 2016. I've also paid off all non-mortgage debt and build a decent emergency fund. Those original numbers have to be lower than they should be though. I think I may not have been counting a couple of side accounts.
-
Our invested assets are earning us about $4.89 an hour, and our debts will cost us about $1.72 an hour average over this year (according to my spreadsheet, could be lower if more is paid down on them than I expect right now).
That nets out to about $3.17 an hour earned by our investments. We're moving up!
Almost a year later and by the same calculation we have a net $4.25 earned by investments.
Getting closer to a minimum wage employee for 1,700 hours a year!
Three years after the first calculation, we have no interest bearing debt and our soldiers are earning $8.10 an hour. Very nice!
-
Okay....hmmm...
If I just count my liabilities, I'm going into a headwind of about $8000/year. $8000/1770 = -$4.50hr. So my headwind isn't quite minimum wage.
My green soldiers are making $80000/yr*0.04/1770 = +$1.80/hr
Net hourly effect = -$2.70/hour. That'll change soon enough!
-
Well, it's a bit difficult to figure what to include and what to exclude, but I come up with about $82/hr, which is quite a bit more than I ever was paid. But fair's fair. When particular divisions of my workers do really well, I'll furlough them. "Guys, over the life of the investment, you've done 18% cash on cash. For the last year or so, 52% cash on cash, and then a return of 75% over my initial investment. I'm glad to have you back safe, and I'm giving you the rest of the year off to spend some time with your nickels and pennies. If you run into any others with your work ethic, have 'em call me, and look for a recruitment bonus." Idling them can limit a particular year's return, but I am convinced it gives me a more committed workforce measured in the long term.
-
Having a small stash, I find it less depressing to figure out how many minimum-wage hours my soldier is working for me.
I did that, too. Mine is roughly equivalent to a summer job at this point. But that's something.
Interesting to revisit this thread after some time away from the forum and away from thinking about these things. The little soldier is still just doing a summer job at minimum wage but now with an extra couple weeks.
-
$23.53/hour but we are much older then most on here:))
-
Just reread the first post, and I still enjoy the idea behind this metric.
My stache is now up to the equivalent of almost 6 people working a full time, minimum wage job for me. Plus we "work" about 20-30 hours/year at 1k+/hr on the tradeline stuff.
("Work" being in quotes, as it consists of logging into a website and copy/pasting some information for 5-10 minutes at a time about 4-5 times per month.)
I can't decide if making a 6 figure income while working a total of maybe 1 hour per week (52 hours/yr, counting all "work"--tradelines, real estate management, etc., but not counting hobby income, all of which is donated to charity) makes me happy, or sad.
It's ridiculous no matter how you look at it. Gotta laugh, and cry, at how absurd life is, sometimes. :)
-
It's great to see these updates! Significant and impressive progress.
-
Hey! This is fun.
+/- $100k * .04 = 4000
4000/1700 = $2.35/hr.
Saw this thread pop up, and was curious what this would look like with current math:
$168k * .04 = 6720
6720/1700 = $3.95/hr.
Not even minimum wage! Sorry soldiers, I'll keep working on that.
I like to imagine those little green plastic army men conducting missions in the market on my behalf, sending convoys of cash munitions to the VTSAX arsenal.
-
$2.94/ hour liquid portfolio
$5.60/hour networth portfolio
2 person portfolio though.
Still have a ways to go but the progress has been speeding up.
Because I love it when people post updates to these sort of things, anyone else care to update their numbers that they posted in this thread?
$11.17/ hour liquid portfolio
-
$7.64/hr assuming 1700 hours a year worked, which seems a bit low to me.
-
If I'm doing this right. ( 1760K liquid x 0.04 ) ÷ 2080 = $34 an hour
Holy Guacamole!
Changed it to 2080 hours. I have 6 weeks paid vacation, but, I'm still paid those weeks. So 2080 hours makes more sense to me.
-
Using the given calculation, my soldiers are making $3.17/hr - or, a waitress in a crappy restaurant with customers who don't know how to tip. I gotta get those guys a better job :P
-
I've got two minimum wage workers. Not too bad.
Better than the $0.03 I earn a day from Youtube.
-
Based on the "Liquid * 0.04 ÷ 1700" calculation, my liquid portfolio soldiers are making me $17.88/hr.
I also have a bunch of soldiers working in a factory with a name of "Pension" on the outside. I don't know how many are in there, and they're working for other people right now, but in six years those guys are supposed to start working for me. They're currently earning $16.47/hr, but when I retire there should be enough of them to make me $23/hr.
When I look at my GF who is supposed to move in with me after she retires in a year, her soldiers are currently earning $20.47/hr. with an additional mystery batallion working in another factory which will start to pay her $17.64/hr. when she retires.
I look at those numbers and I can't imagine how we will spend money that fast. Wow.
-
I've always used 2,080 working hours in a year. Where I'd 1,700 come from?
-
I've always used 2,080 working hours in a year. Where I'd 1,700 come from?
I use 2000 hrs/year. I figure I deserve 2 weeks vacation!
-
Mine are earning about €0,05 an hour ... but by the end of the year, hopefully they'll earn €0,06. And by the end of next year they're supposed to be at €0,10!
-
I've always used 2,080 working hours in a year. Where I'd 1,700 come from?
I use 2000 hrs/year. I figure I deserve 2 weeks vacation!
Here is one answer from the University of Cambridge <https://www.research-operations.admin.cam.ac.uk/costing-and-pricing-research-proposal/what-full-economic-costing>
Q. What constitutes FTE (Full Time Equivalent)?
7.5 hours per day
37.5 hours per week
220 days per annum
44 weeks per annum
1,650 hours per annum
-
I love this exercise! My stash is earning me ~$1/hour at present.
So, I just realized I responded to this thread 3 years 4 months ago -- nowadays my stash is earning me $5 an hour!
-
Recently read a book about construction methods prior to mechanization...very interesting read, and now every time I see this thread title I imagine myself as a Roman engineer, working to build roads all over the empire so my little green soldiers can march!
Hopefully, they enjoy marching for the $3.74/hr I'm currently paying them.
-
Recently read a book about construction methods prior to mechanization...very interesting read, and now every time I see this thread title I imagine myself as a Roman engineer, working to build roads all over the empire so my little green soldiers can march!
Hopefully, they enjoy marching for the $3.74/hr I'm currently paying them.
Unless you're in debt, THEY'RE paying YOU that amount.
Think of them as toll roads, and you can use the money they pay you to build more roads to collect more revenue. ;)
-
I'm up to $2.87/hr.
In just six months, I've broken $3 to now be earning $3.05/hr. This is with my husband who was unemployed finding a new job, us moving to said job and therefore me not working plus a new baby. The benefits of investments are so obvious right now. :)
-
Recently read a book about construction methods prior to mechanization...very interesting read, and now every time I see this thread title I imagine myself as a Roman engineer, working to build roads all over the empire so my little green soldiers can march!
Hopefully, they enjoy marching for the $3.74/hr I'm currently paying them.
Unless you're in debt, THEY'RE paying YOU that amount.
Think of them as toll roads, and you can use the money they pay you to build more roads to collect more revenue. ;)
Eh, you're right. I was up past my bedtime :-) Toll roads it is!
-
stache is at $3.88.
Hopefully two years away from my very own full time minimum wage employee!
-
$43/hr
My husband is working until we see how this health insurance thing is going to settle down and we know what can be counted on
-
Time to revisit and revive my favorite forum thread.
I choose to use the 7% return since I'm in accumulation phase and am not on a fixed withdrawal rate, so it seems to make more sense.
At that rate, at 1700 hours a year (they have a good leave policy) my dudes are earning $6.40 an hour, or almost a grand a month. At 4% it is only $3.65, so I'll take the more fun number until I get closer to cashing in their paychecks.
My second favorite way of looking at my savings is by looking at how many days a month I've saved up to retire with. All things being equal right now, I have finally broken through to March!
-
Time to revisit and revive my favorite forum thread.
I choose to use the 7% return since I'm in accumulation phase and am not on a fixed withdrawal rate, so it seems to make more sense.
At that rate, at 1700 hours a year (they have a good leave policy) my dudes are earning $6.40 an hour, or almost a grand a month. At 4% it is only $3.65, so I'll take the more fun number until I get closer to cashing in their paychecks.
My second favorite way of looking at my savings is by looking at how many days a month I've saved up to retire with. All things being equal right now, I have finally broken through to March!
Thanks for reviving! I remember thinking it was a cool way of viewing the stash when I first saw this thread from a few years ago - since then I've passed up the 1 worker at minimum wage without even knowing it :)
-
$49 @ 4%.
-
My soldiers took a pay cut this year because I bought my first home. Now they're making $1.62 an hour at 4%, which was just above the minimum wage in 1971. https://www.dol.gov/whd/minwage/chart.htm
-
$9.88/hr =P
-
I love this!
My stache is currently earning a mere $3.05 an hour. If I include my equity (ie my whole net worth), it almost employs one minimum wage worker ($7.50) an hour. It's a great way to judge both how much you've saved and what's worth your time in retirement.
I can't remember if I used exactly the method that ARebelSpy recommended but if I did, I've gone from $3.05 to $17.64 in the last 2.5 years. not bad!
-
I'm too lazy to include pension, rental income, Social Security, EF, potential gains from current flip project, etc. However, I love it when an old thread gets revived, so haphazard math it is. Based on invested assets alone, we're at $26/hr.
-
Using OP's math, I'm up to about $15.88 if you include rental income! Which is 1.5 minimum wage soldiers in my state.
-
Mine are earning about €0,05 an hour ... but by the end of the year, hopefully they'll earn €0,06. And by the end of next year they're supposed to be at €0,10!
We're only at the start of Q4 and my soldiers are already earning €0,10 per hour! By the end of this year I hope they're earning €0,11 and by the end of next year €0,18.
-
Based on the 1700 hours calculation, my retirement account soldiers are making $0.87/hr (as of the end of Q1) which is up from $0.85/hr at the beginning of the year. Personally, I prefer to use 2000 hours since I'm not one for taking unpaid days off of work. Under these calculations, my soldiers earn $0.74/hr.
I expect this to improve by the end of the year as I have finally gotten a job as an accountant instead of being unemployed (but working on my Accounting BS). I'm temp-to-hire but my boss has already said that she's very happy with my work and she's just waiting for the temp contract to run out.
Roughly three years later, I'm up to $2.20/hr based on the 2,000 hour math. That's up from $1.79 at the end of 2016. I've also paid off all non-mortgage debt and build a decent emergency fund. Those original numbers have to be lower than they should be though. I think I may not have been counting a couple of side accounts.
18 months later, I'm up to $3.13/hr. The end of 2018 was rough but the markets will come back at some point. I also beat my 2017 contribution amount!
-
I did some calculations before opening up the thread. I'm just looking at dividends on my taxable account right now. I don't chase dividends but I do like to look at them as a more "constant" way to keep score in a volatile market.
This thread prompted me to compare my dividends to the US federal poverty level for 2018, I'm at 92% of the Federal poverty level. They earn $5.37 an hour for a 40 hour work week. I'm at $21 using the 4% rule.
-
$49 @ 4%.
That's fantastic. If my soldiers were making that much, I'd be FIRE'd! Mine are making about $3/hr at 4%.
-
$57.64 @ 4%
-
$57.64 @ 4%
Wow
-
$22.35/hr @ 4% not including pension and SS. Great post, really puts it into perspective.
-
I'm at $9.70 and every $19,000 saved gives them a .447/hr raise!
It really puts things in perspective. Lots of people surviving on this much money even here in the U.S.
-
$6.12 / hour
ooh...I can add a new goal for 2019....will this be the year where my stache eclipses a minimum wage:) Getting so close!!!
-
Using the OP's formula, our investments are making $50.15 an hour.
If we include SS (which is an investment, albeit a mandatory one), it goes up to $71.15 an hour.
That's pretty darn awesome.
-
Mine are earning about €0,05 an hour ... but by the end of the year, hopefully they'll earn €0,06. And by the end of next year they're supposed to be at €0,10!
We're only at the start of Q4 and my soldiers are already earning €0,10 per hour! By the end of this year I hope they're earning €0,11 and by the end of next year €0,18.
And here we are in the second week of '19 and they're making €0,11! Even after that bad Q4.
-
Wow, I don't know how I missed this thread before. This is fantastic.
The line about $320k paying for a full-time minimum-wage workers really hit home. Why? Because I remember back in high school learning about the slave trade. I don't recall what the price was for slaves in the early 1800's, but I calculated how much it would be in 1990's dollars, and it was something close to $250k. Add on inflation (about 40% since then), and you're not far from the original $320k that arebelspy posted.
-
Mine is a bit different as our joint net worth is mainly invested in property.
I worked out the hourly rate a few years ago but deducted mortgages which are now paid off.
4% rule gives an hourly rate of just over £17, which is just over double the UK minimum wage, so I have two little soldiers beavering away for me and the nice government not taking any taxes off them :)
Interestingly, working out our actual hourly rate, it's just over £19, so my little soldiers are doing overtime :). Bless them.
ETA: It appears the average UK worker does 1676 hours a year, so the 4% rate is around £17.40 and actual rate is £19.57. Keep it up guys :)
-
.35 cents an hour! LOL. Hey, it's .35 cents more an hour than it was 7 months ago! Stash size = 15k, which I'm super proud of!
Up to .90 cents an hour but it feels like im being taxed more than that now, lol.
$1.90 now!
Got a raise and am now earning $2.51 now what was near the minimum wage in 1977!
(https://upload.wikimedia.org/wikipedia/commons/thumb/5/5f/History_of_US_federal_minimum_wage_increases.svg/1920px-History_of_US_federal_minimum_wage_increases.svg.png)
-
Using the calculations in the OP, I'm at about $7.02/hr right now. Should hit that minimum wage level in a few months.
-
$3.17 per hour using the 1700 figure.
I think 2000 (or more) is more accurate. That rate would be $2.70.
I think I can add at least $1 per hour this year.