Fean
Dryer sheet aficionado
I've really been struggling with one-more-year (OMY) syndrome recently. From what I've seen on the board's recently, I'm not alone. The market run-up probably has a lot to do with that -- I can practically taste my freedom
I was playing with a spreadsheet the other day and found something that helped me put OMY in perspective. I thought it may be of general interest so I'm posting it here.
Until recently, I have always thought of OMY from the perspective of "If I work one more year, I'll be able to spend X additional dollars (after tax and adjusted for inflation) every year for the rest of my life." The value of X essentially told me how much my annual budget (or buffer) could increase for the rest of my life. That is a useful metric and it's been useful to me over the years.
However, it is hard for me to put a price tag on the value of an entire year of my life and that makes it very difficult for me to keep things in perspective. I now break things down into smaller time periods that are easier for me to comprehend. For example, my current spreadsheet tells me that each week I work this year will allow me to spend $1 (after tax and adjusted for inflation) every week the rest of my life.
Is an additional $1/week for life really worth dealing with my current j*b for this week? That's something concrete that I can really wrap my mind around when I get up Monday morning and dread heading to the office.
You can do similar calculations for other time periods too. For example, each day I work will let me spend an additional ~2 cents each day for the rest of my life. How much is a day of your life really worth? This was the calculation that really opened my eyes.
The formulas I used are:
-Fean
I was playing with a spreadsheet the other day and found something that helped me put OMY in perspective. I thought it may be of general interest so I'm posting it here.
Until recently, I have always thought of OMY from the perspective of "If I work one more year, I'll be able to spend X additional dollars (after tax and adjusted for inflation) every year for the rest of my life." The value of X essentially told me how much my annual budget (or buffer) could increase for the rest of my life. That is a useful metric and it's been useful to me over the years.
However, it is hard for me to put a price tag on the value of an entire year of my life and that makes it very difficult for me to keep things in perspective. I now break things down into smaller time periods that are easier for me to comprehend. For example, my current spreadsheet tells me that each week I work this year will allow me to spend $1 (after tax and adjusted for inflation) every week the rest of my life.
Is an additional $1/week for life really worth dealing with my current j*b for this week? That's something concrete that I can really wrap my mind around when I get up Monday morning and dread heading to the office.
You can do similar calculations for other time periods too. For example, each day I work will let me spend an additional ~2 cents each day for the rest of my life. How much is a day of your life really worth? This was the calculation that really opened my eyes.
The formulas I used are:
- $ per day per day = (total $ you would save in one year) / 365 * (withdrawal rate %) * (1 - tax rate %) / 365
- $ per week per week = (total $ you would save in one year) / 365 * (withdrawal rate %) * (1 - tax rate %) / 365 * 7 * 7
-Fean