The Rule of 72 is well known: Divide 72 by a rate of return to get the number of years for your money to double. Example: at 4.5% return it will take 72/4.5= 16 years to double your money
Here are a few more quick calculations:
Cost Before Taxes
Multiply an item’s cost by 1.4 to figure out what you need to earn before taxes to afford it
Example: A $250 Nintendo Wii will require 250*1.4= $350 in pre-tax earnings
Hourly Rate to Yearly Salary
Double your hourly rate and add three zeros to get approximate yearly salary
Example: at $20/hour, you make about 20*2 = 40 –> $40,000 per year
Yearly Salary to Hourly Rate
Opposite of above: Remove three zeros from your yearly salary and cut in half to get an approximate hourly rate
Example: at $60,000 per year you make about 60,000 –> 60/2 = $30/hour
Current Spending Versus Nest Egg Worth
Add a zero to the cost
Example: Using $2,000 for a new computer today would have been worth 2,000 –> $20,000 in a retirement account 30 years from now.
Calculations assume a 40 hour work week, 8% investment return, and 28% tax bracket.
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