Traditionally, we think of our income and then apply that to the value of our free time. For example, if you make $50/hr, you might think of your 8 hours off work on Saturday as worth $400. For a variety of reasons (you can't just work on any random schedule, you can't work 24/hrs day, you may be demand constrained, etc), that doesn't seem like it'd make sense.
And we don't really evaluate most things in the world of FIRE from an income perspective. We talk about spending.
Why not evaluate time in the same way?
What if we thought of the cost of time we earn, our exit from traditional work, as the sacrifice of spending?
For example: if you make $100K (after-tax) and decide to have a 50% savings rate, you're sacrificing spending $50K to earn [future] non-working hours. Rather than retire at 65, maybe you retire at 35. You earn 30 years of 8 extra non-working hours per day.
How much spending do you sacrifice per hour of saved time?With this different approach, what would the math look like? I built a "calculator" (forgive my rudimentary Google Sheets knowledge) to evaluate this question. You can download a copy of the sheet and figure out the totals by plugging in your own variables.
My data looks like this (using my own income/RE timeline/etc):
I've linked the spreadsheet image to the google sheet which should prompt you to create your own copy automatically. Here's the link if you have trouble:
https://docs.google.com/spreadsheets/d/1hTXE4lkZwnndbAY2qb7oY2EiRGD2SrVQZ1hCy4n1Uc8/copyI'm pretty happy to trade NOT spending about $2M over the course of my life in exchange for about 60K hours of additional free time but the numbers weren't quite what I'd have guessed. I think that establishes my
Value of Time well, but we're all different.
What do you all think of this novel approach and what do your numbers look like?
