As I’ve detailed several times in these here bits and bytes pages, I took a part-time job in 2022. I took it to earn income during that year’s garbage markets environment. And kinda sorta as funemployment.
In both respects, mission accomplished.
On first glance, the job don’t pay baller money. But there’s more to the story.
That “more” warrants a second glance. Here’s why.
Funemployment is all the wage
The job paid minimum wage to begin with. But, you see, my city’s minimum wage is high. Like, dwarfs-the-federal-minimum-wage high.
I’ve also gotten annual raises. Modest sums. But something.
For the limited number of hours I work, my income therefore ain’t nothing.
What’s more, as I’ve mentioned in past posts, I contribute 20 percent of my gross pay to my account in the employer-sponsored retirement plan. I oppened the account in the teeth of the 2022 bear market.
My account balance today is roughly 20 percent higher than the sum of my contributions.
The take-home pay, of course, also lowers the amount I need to take from our investments to cover our expenses. Per the four percent rule for those who celebrate observe, every $25,000 of liquid investments (in certain portfolios) supports a $1,000 withdrawal over a 30-year time horizon. Put another way, $1,000 of income obviates the need for $25,000 in such investments. By this measure, even taking into account I’ve only had the job for about 2.5 years, my take-home pay has obviated the need for lotsa dollars in investments. Maybe into the six figures already.
My contributions to the employer-sponsored retirement account will add lots more monies. Using the average annual rate of return on my pretty conservative investment fund, my account balance at age 65 (less than 15 years from now) should be comfortably in five-figure territory even if I never contribute another penny.
Between my take-home pay, the investment funds rendered unnecessary, and the employer-sponsored retirement account monies, we’re talking hundreds of thousands of dollars of value to me and The Missus from my funemployment “job.”
But wait. There’s more.
The son also rises
I recently finagled a part-time job at my employer for Thing Two (The Younger). I suspect that he’ll stay in this job at least until he graduates high school in a few years. In fact, he’ll prob’ly have the job even longer.
What’s more, in one of my prouder victories, I not only convinced Thing Two to open and contribute to an account in the employer-sponsored retirement plan, but to shovel lotsa money into it. Thing Two balked at my strong suggestion to have upwards of 90 percent of his pay go into the account. But he did agree to contribute 75 percent. I’m chalking that up as a win. A bigly win.
Given the number of hours I expect Thing Two to work in the job, even if he only has the gig for just a few years, assuming a doubling of the employer-sponsored retirement account balance every eight years and a continued 75 percent contribution rate, by the time Thing Two is 65 years old, his account balance would be worth . . . wait for it . . . over $1 million.
Not too shabby.
This isn’t my money, of course. It’s Thing Two’s. But I’m factoring it in as a monetarily quantifiable benefit of my part-time job. I mean, I did get Thing Two the job. Which, but for me already working at the place, he likely wouldn’t have known about and may not have gotten even if he did and applied for it.
It also gave me a unique opportunity to convince Thing Two to make impressively high contributions to the employer-sponsored retirement account and to help him open the account (side note: Thing Two doesn’t know it yet, but I’ll continue suggesting that he up his contributions to 90 percent).
Thing Two’s take-home pay is, of course, low given how much he’s plowing into his retirement account. But it’s not nothing. And in terms of monetarily quantifiable return from the job, it can be added to the potential $1+ million he may realize from the retirement account contributions. What’s more, if he needs and uses his take-home earnings to pay for college, he may also obviate the need to take out any loans he otherwise might’ve otherwise needed to. And the interest those loans would accrue.
Benefits on the fringe
Left unsaid thus far is that the jobs have value beyond the pecuniary. For me, that takes the form of socialization and structure for the days that I work.
For Thing Two, it’s all that plus getting some of his first work experience and making connections who may be able to help him at some unknown later point and in some unknowable way.
All this is monetarily unquantifiable. But it’s surely worth a lot.
Not bad, ‘eh Dear Reader?
And in the end . . .
Now, I’m all for a high minimum wage. But my city has a really high one. Is that ideal from a societal standpoint? I’ll leave that up to you, Dear Reader, to say for yourself. But there’s no question it’s benefitting me and The Family. Thank goodness my city hasn’t blocked efforts to raise the minimum wage in recent years.
