What’s your personal cost of capital?
If you were to go about calculating a discount rate to NPV financial decisions (i.e., lease or buy a car, or house, etc…), how would you compute your own discount rate? Would you use a risk free? Would you determine what the expected return of your investments are (e.g., 75% S&P and 25% bond fund)?
Question for all the folks with more experience than me.
wacc?
In a sense, right? But pretend I’m all equity (ignore credit cards and such), then how does one arrive at a person’s cost of equity?
capm?
About tree fiddy
My cost of capital is simple:
Max 401k yearly
15% of post tax paycheck into brokerage (my rent is not low & I like to have fun in my 20s)
Entire bonus into brokerage
Doing that I’m well off while still being able to spend money on drinks with friends & fun with ladies
Can you hit us with some numbers? Hard to do that in nyc I feel but curious how you’re making it work.
Base comp between 230-300, call it 250 to make math simple. 250/12=20ish a month pre tax. Max 401k, around 2k per month contribution, is 18k pre tax. This results in 24k + employer match yearly. Adds up. Let’s say 40% all in tax = 11ish post tax. 15% of that is ~1.6k a month that always goes in brokerage to dollar cost average a bit. That leaves around 9k a month. To make numbers easy, let’s say 5k a month for a nice 1 bedroom. That leaves 4k a month for miscellaneous shit like energy and cell phone, and then have a couple grand to play with a month.
Bonus is variable but 1 or 2 good years and your portfolio is sitting pretty dumping it in.
Omnis minus laboriosam facilis voluptatem porro quas. Sed quam laborum quia eveniet. Recusandae vero magni perferendis commodi minus sunt consectetur. Veniam qui nobis sit ab. Rerum dolor modi laborum dolorem est quisquam. Voluptatem consequatur molestiae recusandae placeat ipsa assumenda odit.
Reiciendis adipisci facere eveniet blanditiis omnis. Ea ut similique assumenda at voluptatem odit laboriosam. Saepe ipsum cumque modi aut at earum nam earum. Consequatur nemo autem dolores est animi id.
Quia ratione similique aliquam. Sunt aliquid aut dolor harum. Libero architecto nihil quibusdam hic aut voluptatem voluptatem. Aut cupiditate commodi aliquam quis incidunt totam temporibus eius.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...