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In the financial independence community, people often criticize a bought lunch or a Starbucks coffee. But how much do your work habits actually cost you? In this article, I plan to take a deep dive into the numbers and discover the true cost of the average employee’s daily work habits. Once you understand the relationship between money and time, your whole worldview might just change.

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Money Equals Freedom

I think that converting money into time is one of the most powerful ways to understand financial independence. But how do we actually convert our hard-earned dollars into hours of freedom?

Fortunately, one of my friends in the FI community, Noah from Money Metagame, wrote a post titled “The Value of an Extra $100”. In this post, he breaks down the math and concludes that $100 equals approximately 4.74 hours of freedom for his specific situation.

In short, Noah arrives at this conclusion by taking the $100 and multiplying it by its expected growth rate (6% in this case) and raising that growth to the power of “Years left to FI”. He then takes that output and divides it by his real hourly wage to calculate the “Hours of Freedom” earned! For all of you non-math geeks out there, click the link in the paragraph above to check out his full post where he explains in further detail.

Noah’s analysis inspired me to write this post and calculate just how much the average American daily work habits cost – from a financial and time-related point of view.

The Average American Daily Work Habits

I know that these assumptions will not accurately reflect every single working individual, but for example and simplicity’s sake, we will work with the following assumptions in this analysis.

Assumptions

Each individual starts his or her career at age 22.

Lunch costs $10 per day, coffee costs $3.

Each individual works 8 hours per day, 5 days per week.

Any money that would have been spent on lunch or coffee is invested into the market every month.

The market returns an average of 6% per year (after inflation).

Each individual has $5,000 per year to invest; any money spent on coffee or lunch is deducted from that investment.

Financial Analysis

Okay, so at first glance, we notice that ‘Neither’ invests $5,000, ‘Just Coffee’ invests $4,280, ‘Just Lunch’ invests $2,600, and ‘Lunch + Coffee’ invests $1,880 per year. Let’s fast forward 40 years to age 62 to see how each individual fared.

Wow!!! Were you as shocked as I was? At age 62, here’s how each of the four individuals fared:

Neither – $825,238 net worth

Just Coffee – $706,404 net worth

Just Lunch – $429,124 net worth

Lunch + Coffee – $310,290 net worth

So over the course of 40 years, the individual who brought lunch from home and drank coffee from the forsaken work kettle had a net worth $514,949 higher than the individual who bought lunch and a coffee every single workday!

Edit: For all of the comments I received about how “a homemade lunch is just as expensive as a bought lunch”… here’s an awesome list of 46+ meals you can prepare for under $2.

If you thought that was gut-wrenching, you’re really not going to like the next part of this analysis…

Time Analysis

Diving into the finances is great, but if you’ve been reading my blog, you know that money is not our greatest asset, time is. With that being said, let’s dig into the numbers and see just how many days, hours, and years these daily work habits cost these individuals.

The one key assumption here is an hourly wage of $22.81. This information was extracted from 2018 Bureau of Labor Statistics Data on the Average American’s hourly earnings.

Now that we have quantified the value of ‘one hour’, we can use this number as a denominator to look back and see how much time these daily work habits cost each individual (we will ignore taxes for the sake of simplicity and future uncertainty).

I don’t know about you, but when I convert dollars into hours, that’s when it really hits home for me. Just look at the freedom money can buy!

The 62-year-old individual looking back on the past 40 years of his or her career would be devastated. Their choice to purchase a daily coffee and lunch cost them $514,949 in dollars lost, 22,576 in hours lost, 2,822 in days lost, and 7.7 years lost.

Imagine all of the things you could do in that span of time! I get excited for a 4-day weekend… but 7.7 years?! The opportunities are endless.

Are You Going to Change Your Work Habits?

Hopefully, reading this article caused you to stop and think about your current work habits. Are you really that much happier each day from your bought lunch and Starbucks coffee? Maybe you are, but at least now you understand the financial and time-related implications of your decisions.

Time is truly our most valuable asset, so anything we can do maximize it is a win in my book. Did this post inspire you to pack a lunch tomorrow, or pass on that coffee you were about to buy. If so, please share in the comments below!

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Note: I am not a financial advisor or fiduciary. All the information presented in this article reflects my opinion. I am not liable for any financial losses incurred related to this content. My content is always written with the readers’ best interests in mind. I believe that my content is helpful and well-researched, but it is not professional financial advice. For more information, read our Privacy Policy.

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