[ExI] Psychology of "Entitlements"

Alejandro Dubrovsky alito at organicrobot.com
Fri May 15 10:47:11 UTC 2009

On Fri, 2009-05-15 at 10:08 +0000, BillK wrote:
> On 5/15/09, Alejandro Dubrovsky wrote:
> >  I don't think you've done your calculations correctly:
> >  Average full time salary in Aus is very close to 50k, which leaves 40k
> >  after tax if you don't owe HECS (37 otherwise).  Dole is 15k with rent
> >  assistance, but before all the other benefits (concession card,
> >  telephone assistance, etc).  If you assume you are happy to live on the
> >  same amount of money while working full time as you are on the dole
> >  (very hard, much more expensive to have to get out of the house every
> >  day and also to keep work-stress manageable without money), you can save
> >  25k per year.  7 years gives you 175k, good for under 12 more years of
> >  dole equivalent.   7 on/12 off is not a terrible split, and I hope I can
> >  do that, but it's not 7 on/infinity off.
> >
> You are forgetting the wondrous magic of compound interest.
> (Not unusual - the secret is known only to a few)  ;)
> It starts slow, like all exponentials, but the end is wonderful!
An amount of interest equal to the inflation rate is assumed in the
above calculations to keep the dollars constant.  Most banks will give
you only 1 or 2 percent above the inflation rate on secure investments.
This translates to less than the avoided costs of having a full-time job
that I mentioned above (but go on and add another 3.5k on the first year
after quitting if you like, it doesn't change the equation by much).
Also remember that you are living off your principal, ie your money
doesn't grow ever-larger.

More information about the extropy-chat mailing list