Checks and Balances - Deepstash

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Calculating the Value of Time: How Much is Your Time Really Worth?

Checks and Balances

  • Take-Home Pay Method. This method is based on the pay you take home.
  • Market Rate Method. This method is useful to test your numbers. Check the rate you could expect to earn if another company hired you for a job you were qualified to perform.
  • Cost-Based Method. This is the rate you would pay someone else to do the work that you do.

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EXPLORE MORE AROUND THESE TOPICS:

SIMILAR ARTICLES & IDEAS:

Net Worth = Assets - Liabilities

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...

Calculating your assets and liabilities

Assets are anything of value that you own that can be converted into cash. Examples include:

  • Investments
  • Bank and brokerage accounts
  • Retirement funds
  • Real estate
  • Personal property: vehicles, jewellery and collectables.
  • Cash

Your liabilities represent your debts, such as loans, mortgages, credit card debt, medical bills and student loans.

Find your ideal

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.

Investing defined

Investing is about laying out cash or assets now, in the hope of more cash or assets returning to you tomorrow, or next year, or next decade.

Most of the time, this is best achieved th...

Productive assets explained
  • Productive assets are investments that internally throw off surplus money from some sort of activity. 
  • Each type of productive asset has its own pros and cons, unique quirks, legal traditions, tax rules, and other relevant details.
  • The three most common kinds of investments from productive assets are stocks, bonds, and real estate.
Investing in Stocks
  • It means investing in common stock, which is another way to describe business ownership or business equity.
  • When you own equity (the value of the shares issued by a company) in a business, you are entitled to a share of the profit or losses generated by that company's operating activity.
  • Equities are the most rewarding asset class for investors seeking to build wealth over time without using large amounts of leverage.
What early retirement means
What early retirement means

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.

...
How to retire early

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.

The money you need for early retirement

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%.