How to Calculate Lifetime Earnings
Here are the steps to calculate your lifetime earnings.
Step #1: Estimate the total annual raise and cost of living increase percentage. If you expect to receive a total increase of 3% per year, convert the percentage to a decimal and add 1 to the result (3% = .03, + 1 = 1.03).
Step #2: For each year between now and retirement, multiply last year's income by the growth factor from Step #1. If your starting annual salary is $35,000, and you anticipate a 3% annual increase, here is how the first three calculations would look:
|1||$35,000.00 x 1.03 =||$36,050.00|
|2||$36,050.00 x 1.03 =||$37,131.50|
|3||$37,131.50 x 1.03 =||$38,245.45|
Step #3: Once you have completed the calculation for each year between now and retirement, total your annual income predictions (total of column #3 above). The result will be your forecasted lifetime earnings.
Why Do the Rich Get Richer?
You could come up with a multitude of reasons that attempt to explain why the rich get richer. But in my opinion, there's only one reason.
The rich get richer because the poor and middle class continue to hand all of their potential wealth over to the rich. After all, the rich are not printing their own money. Where else would it be coming from?
I honestly believe that if you put every dollar of everyone's net worth into one account, and then redistributed that amount equally between every citizen of the country, it would only be a matter of a few years before the bulk of the money would end up right back in the hands of the rich.
Why is that?
It's because you and I have been taught since birth that the key to happiness is to buy the things that we've been led to believe will make us happier -- even if it means renting (borrowing) the money to buy them.
Who's been doing the teaching?
That's right, the rich.
And how are they doing the teaching?
Easy. They have ivory towers teaming with the best marketing minds money can buy, who in turn enlist the services of highly paid actors and actresses who are experts at making us believe they are actually experiencing the benefits being advertised.
And what happens when you add the best lobbyists money can buy? It's what we up North refer to as "hook, line, and sinker."
Turning the Tables
So how can we turn the tables on the rich? That's easy. We have to stop playing the "fool" in "a fool and his money are soon parted."
And the key to that is to become financially savvy enough to instantly recognize when someone is feeding us a line of bull.