The true price of things

What is the true price of a $100 watch?

If your tax rate is 30% then you’ll need to earn $142.85 to receive $100.

100 / .7 = 142.85

And what about the interest lost on that $100 over, say, 10 years? That’s $164.70.

100 * (1 + (0.05/12))^(12*10) = 164.70

Of course, price doesn’t equal value. If a watch brings greater than $164.70 in value, then you’re in the black.

$100 in the bank is not $100. It’s $142.85 in earning power.

$100 in the bank not earning interest is $164.70 in missed returns.