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Calculating the Value of Time: How Much is Your Time Really Worth?
If you're an hourly worker or a salaried employee, look at your latest paycheck and multiply it by the number of paychecks you receive per year. Also, include money from side hustles and freelancing gigs.
You are trying to calculate your take-home pay.
150 SAVES
SIMILAR ARTICLES & IDEAS:
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Key Ideas
Your net worth gives an overview of your financial situation at this point. It is the difference between what you own and what you owe.
Your net worth is positive if your assets exceed...
Assets are anything of value that you own that can be converted into cash. Examples include:
Your liabilities represent your debts, such as loans, mortgages, credit card debt, medical bills and student loans.
Determine your target net worth - where you want to be in the near-term and long-term future.
The following formula is helpful:
Target Net Worth=[Your Age−25]∗[1/5∗Gross Annual Income]
A 50-year-old with a gross annual income of $75,000 might aim for a net worth of $375,000 ([50 - 25 = 25] x [$75,000 ÷ 5 = $15,000])
Your net worth can be much more or much less than the amount indicated by the guideline.
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Key Ideas
Early retirement is not defined as when you stop working forever, but as having the freedom and flexibility that saving up enough money can give you if you want to leave a job.
...A good early retirement strategy is built on maximizing three aspects: Income, expenses, and savings.
To build your early retirement strategy, you need to determine your retire early or financial independence (FI) number. It is the amount of money you need for work to become optional. Be aware that the number will (and should) change as you change, and your desired lifestyle evolves.
Based on a series of papers known as the Trinity Studies, you need to save 25-30 times your expected annual expenses to have enough money to last you for the rest of your life.
This multiple is based on the percentage of your investment growth that you would be able to withdraw per year. A safe early retirement withdrawal percentage is between 3%-4%.
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Key Ideas
Generally, insurance is understood as a bet. We pay a premium and are secure about some uncertain future costs which may be substantial for us.
If we check the calculations of our monthl...
The calculation for insurance runs like this: The company is profitable when the cost of premiums that we pay is greater than the future claim that we may ask for (having a certain probability).
Cost of Premium > (Cost of claim) x (Probability of claim)