B101.5 - Math Tricks and Tips for Quick Insight |
These basic math tricks are used by man on a daily, weekly or monthly basis for self evaluation and business evalution. They make for a few great tools for making quick, off the cuff evaluations regarding business decisions and Time Bending benefits.
1) Efficiency -- What is an hour saved worth? (TIME BENDING 101)
This math below assumes a 40 hour work week...
If THIS SOUL PROPRIETOR GUIDE material helps you figure out how to save 220 hours/year, which it easily can for most, it will have helped you recapture 5.5 weeks per year of working time for the rest of your working life....
- If you save 1 hour/week that equals 52 hours/year. That is over a week's worth of work (or free time) at the end of the year that is mine to reclaim
- If you save 5 hours/week (which is 1 hour per work day), that equals 220 hours/year. That is equal to 5.5 work weeks of TIME RECLAIMED (assuming 40 hour weeks)!!
- If you wanted to reclaim 5.5 weeks of time in a year (220 hours/year) >>
- You need to shave 5 hours from a 40 hour work week
- You need to shave 7.5 minutes per hour during an 8 hour work day
- You need to shave 5.25 seconds/minute during an 8 hour work day
- You need to shave 9/100th of a second/second during an 8 hour work day
If THIS SOUL PROPRIETOR GUIDE material helps you figure out how to save 220 hours/year, which it easily can for most, it will have helped you recapture 5.5 weeks per year of working time for the rest of your working life....
- Giving someone information that can be used to save that kind of time seemed like a cool gift, thus, that's what we've tried to do.
- Truth be told, we think you have the potential to do a lot better than that depending on where you are and the tools you can embrace to come up to speed.
2) Hourly Rate to Equivalent Annual Salary Conversion (and in reverse)
Hourly Rate Conversion to Annual Equivalent Salary
Hourly Rate conversion and Annual Salary Conversion Quiz #1
Hourly Rate conversion and Annual Salary Conversion Quiz #2
- To Convert Hourly Rate to Annual Equivalent Salary you 1) "double the hourly rate" and 2) "add three 0's"
- $15/hour >>> (15 x 2 + "000") >>> $30,000/year
- $25/hour >>> (25 x 2 + "000") >>> $50,000/year
- This assumes a 2000 hour work year. Actual math is 40 hours/week x 52 weeks/year = 2080, so it's close. Don't get hung up on the exact numbers. If you want exact numbers do exact math. This is for 2 second analysis.
- This is just the reverse of above... To Convert Annual Salary to Hourly pay you 1) "drop three 0's" and 2) "divide by 2".
- $24,000/year >>> 24/2 >>> $12/hour
- $36,000/year >>> 36/2 >>> $18/hour
Hourly Rate conversion and Annual Salary Conversion Quiz #1
- If you can make $30/hour working 20 hours per week, how much is that per year?
Well, full time at $30/hour would be $60k/year... half of that would be $30k/year. Hey, look at that, if you work half weeks, you can just add three zeros to the hourly rate to get the annual salary too. - If you were comparing that to working a 40 hour per week job, $24k/2/1000 = $12/hour...
Hourly Rate conversion and Annual Salary Conversion Quiz #2
- If you can make $30/hour working 16 hours per week, how much is that per year?
There are several ways to approach this. We know 20 hours per week would be $30,000/year and 16/20 = 4/5 = 80% and 80% of $30,000 = $24,000. - If you were comparing this opportunity to a 40 hour per week job, what is the comparable salary for working 40 hours per week?
$24,000 >>> 24/2 >>> $12/hour
If you had an opportunity to make $30/hour 16 hours a week, and someone else was currently making $12/hour working 40 hours per week his income would be equal, and I could use that information to decide if I wanted to go to part time work for a higher rate. And all this can be done very quickly in ones head or with a little help from a calculator.
3) The Rule of 72
Rule of 72 -- Money doubles when the interest rate times the number of years it takes to double equals 72.
- 7.2%, x 10 years and your money doubles
- 10% x 7.2 years and your money doubles
- 5% x 14.4 years and your money doubles
4) Tax Rates
https://www.irs.com/articles/projected-us-tax-rates-2016
Marginal Tax Rate on your first $10,000/year in income
Marginal Tax Rate for the next $10,000 to $40,000/year
Marginal Tax rate for your income from $40,000 to $115,000/year
Marginal Tax Rate for every $$ made between $115,000 and 200,000 /year
Marginal Tax Rate on your first $10,000/year in income
- Use 0% (You get about $10,000 in exemptions and deductions)
Marginal Tax Rate for the next $10,000 to $40,000/year
- Use 35% (15% federal, 15% Social Security, 0-10% state -- so actual is 40-50%)
- In fact it's 5% less on the the $10-20k band, but in the big scheme of things, that isn't that much.
- Yes, it varies, but this will get you close
Marginal Tax rate for your income from $40,000 to $115,000/year
- Use 45% (25% federal, 15% Social Security, 0-10% state -- so actual is 40-50%)
- Yes, it varies, but this will get you close
- This is to accommodate 1) Federal Tax, 2) 15% Self-Employment (social security) tax, and 3) State Income Tax
- Yes, as a self employed individual you will approach a 50% tax rate on the first $100k of income.
Marginal Tax Rate for every $$ made between $115,000 and 200,000 /year
- Use 33% (28% for Federal Tax, 0-10% for state tax so actual is 28 to 38%)
- Yes, it varies, but this will get you close
- Our Total Tax Burden on Citizens in the US is much higher than most readily admit to -- If you add in the "state sales tax" you pay when you purchase stuff with your after tax $$$ (5-10%) and then add in "required insurance" like health insurance as if it was a tax, you can easily approach a 60-70% tax rate.
It might not be so disgusting if 1) people woke up to this reality and/or 2) if we got Scandinavian benefits. Unfortunately, people who are working are clueless to this because they don't see the other 7.5% social security being paid by their employers, nobody thinks about sales tax when they think of taxes they pay out, and people are brainwashed to believe we don't pay as much in tax as the those in other countries who get far more for their money because the insurance being paid out on their energy is NOT showing up on their paycheck. - Lack of Benefits -- Self employed people get hit with 7.5% more burden in Social Security, they are on their own for health insurance, they get no paid holidays nor any other time off benefits. Does this system really sound like a system which is designed to encourage entrepreneur ship and self employment? In fact, our system is setup to do exactly the opposite of what every thinks we are about. Our Tax, Labor and Benefit system is designed to discourage innovation and self employment, believe it or not.
- Tax Rates and Real Estate Holdings -- See section below.
4) Tax Rates and Real Estate
Real Estate Holdings as part of a Portfolio does dramatic things to Tax Rates...
Real Estate Holdings as part of a Portfolio does dramatic things to Tax Rates...
- Most people who have accumulated a lot of financial wealth have done it with the addition of Real Estate to their portfolios.
- It is a game meant only for those who have the head to play it, and it has been setup by some elite folks with various barriers to entry and traps that prevent many from playing.
- Owning a home is sold to us as a tax benefit. It can be very beneficial for many, but it can in fact become a very heavy ball and chain to work around and it is not generally meaningful for maintaining flexibility in ones life until you begin to make significant money above your basic expenses.
- Real estate is not for everyone. Educate yourself. If you think it's for you, start with a property for yourself that can be converted to an investment and take one step at a time.
- The "flip this house" seminarians are scammers. Don't feed them.