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How would you like to get 5,054 hours of your life back, without having to pay for it? How would you like to get 2.43 years off from work? Your numbers may vary, but we’re going to show you how. Now, it isn’t something that you don’t already know about, but what we are going to do is provide a different perspective.
For this article, this is you:
- Annual Salary: $30,000.00
- Work Schedule: Mon. – Fri. 9 am – 5 pm
- No vacation (for simplicity)
- You hate your job, but you’re stuck there.
- Mortgage Amount: $100,000.00
- Mortgage Term: 30 Years
- Mortgage Rate: 5%
- You pay the regular monthly payment.
Applying our assumptions, you will pay the house off in 30 years (you have the perpetual mindset) and will have paid $93,255.78 in interest. How else can this be understood? You’ve spent 3.1 years (93,255.78 / 30,000 = 3.1) sitting at your desk, at a job that you’ve hated, and given 100% of your income away. Not ugly enough? You’ve spent 6,448 hours sitting in that uncomfortable chair, looking at your computer screen and given every penny away.
Give Me That Time Back!
Now you’re talking! What else would you have done with that time? If I had to take a guess, I’d imagine you would have done something other than stare at a computer screen. It’s time for you to get that time back. It comes with extreme effort, but the more effort you put forth, the more time you get. Yes, this is performance pay. The more you perform, the more time you’re paid back.
How do you get that time back?
It is simple, you just pay that mortgage ahead. The more you pay ahead the more you save in interest (which converts to time). Where did my numbers come from? It is simple, pay an extra $800 a month and you pay the mortgage off in 7.5 years saving you from 22.5 years of tedious payments and $73,000.00 in interest.
Boring Math Warning:
$73,000 / $30,000 (your annual income) = 2.43 years
2.43 years * 52 weeks in a year = 126.36 Work-weeks
126.36 Work-weeks * 40 work-hours per week = 5,054.4 hours!
Now, I’ve heard this all before: “I can’t pay an extra $800 a month!” I’ve seen some people who can, and others that can’t. For those that can’t, fine, but can you do $700, $600, $500, $400, $300, $200, or $100 a month? Most people can make some wiggle room, and the effects do add up! Let’s do $100 a month, because I’m sure most people can scrounge that up.
Boring Math Warning:
$30,580.25 (interest you’ll save) / $30,000 (your annual income) = 1.02 years
1.02 years * 52 weeks in a year = 54 work-weeks
54 work-weeks * 40 work-hours per week = 2,160 hours!
By not paying an extra $100.00 on this mortgage each month, you are volunteering to work for 2,160 hours, pecking at a keyboard, sitting in an uncomfortable chair, staring at a computer screen working a job that you hate! Worse yet, you’ve going to give all of that money you earn to a bank for letting you use their money.
Why on Earth would you do that? Take back those hours! Spend time with your family, travel, fish, golf, hang out with the girls, hang out with the boys, and have fun!
About Wealth Artisan
Yep. You can cut down the interest by paying down the mortgage ahead of time. You can also increase quality hours by investing. Investing gives you additional quality hours in the future through compound growth.
Absolutely, the growth on investments can easily supplement, replace or give more time (when converting your dollars to time). It’s amazing to consider how some people’s investments, and its earning potential exceeds what they can generate even if they committed to a 24 hour work schedule! When your investments are better at earning money than you are (physically), you’re doing something right!
Thanks,
Timothy
Damn! Great eye-opening post. I got angry just reading it. That a lot of your life wasted. Going to go update the auto billpay on the mortgage right now. Thanks.
Hey James,
It is a lot of wasted time, and the majority of people do it. I’m glad that I helped! Eventually, you’ll never notice the extra money being gone.
Thanks,
Timothy
Sounds like a good way to think. What about just harnessing debt instead!
I always calculate costs and analysis based on hourly wages, either net or disposable income.
If it’s a laptop I want, I calculate my hourly disposable income to know how many hours I have to work to pay for it, and if it’s something like a mortgage, net income is more interesting, although I’d probably change the following variables:
50 working weeks (2 weeks vacation, as it’s rare to see people NOT take vacation of some sort)
Calculate the removal of other payments like on my groceries and gas, and use that final amount that is disposable income & mortgage payments to use as a calculation of how many hours I’d save.
Or I’d leave $100 out of the equation of my net income after taxes for disposable income/vacations and calculate the rest of it going to my mortgage versus what I pay now.
Lots of fun ways to see how much more you can save
Hi FB,
Absolutely. I think more and more, people are beginning to put purchases into terms of hours worked and realizing how truly expensive many things are! Thanks for highlighting how you do things
Thanks,
Timothy
This is a good exercise to run even without the mortgage. Just think about how much you’ll have to work for each expense that you have. Think about it as far as opportunity costs are concerned.
Great post!
Thanks Khaleef,
It is definitely important to consider what you’re missing while you sit at work. :-/
Thanks,
Timothy