Re: Hourly pay rate conversion to Annual gross wages

Re: Hourly pay rate conversion to Annual gross wages   (12/24/2014, 10:35 PM)

Well, in my understanding it is elementary math. But, since I an neither a math wizard nor a college graduate here is my logic.

There are 52 weeks in a year. Each week an employee works for 5 days or 40 hours.

So 40 divided by 5 = 8 hours a day.

So 52 [weeks] x 40 [hours] = 2080 [hours]. If you get paid $1.00 per hour you would [or should receive] $2,080.00 for working those 2080 hours without any deductions.

I you take 14 day of vacation, or 2 weeks you would still get paid your normal rate. [ 5 days * 8 hours = 40 hours * 2 weeks = 80 hours * $1.00 = $80.00].

Now if you take just $0.25 per day of work and deposit it into a savings at the end of each week, you would have a small next egg of 0.25 * 5 = $1.25 per week * 52 weeks = $65.00 per year.

Each year you buy shares of General Electric Co. As of 12-24-2014, the stock is at $25.83 and pays $0.93 per share or 3.76% per year. So today you could buy 2 shares, [$65.00 / $25.93 per share] and have $13.34 left over for next year. At the end of your 45 year career [age 20 + 45 years = 65 years of age] you would have 90 shares from your investments. Also, the $13.34 * 45 years = $604.30. At $25.00 per share average purchase you could get another 24 shares. With compounding and dividend re-investment you would have a nice retirement bundle all on a pay rate of $1.00 per hour. I wonder what you could get at your actual pay rate!