Your Lifetime Earnings

Changing phases of life






Have you ever sat and wondered. Maybe on a monday morning feeling lethargic and then proceed to ask yourself why you have to get up and go to work? Asides the therapeutic effects of working (yes there are), it helps to know how much you are really working for.
I have done an analysis of a basic scenario of a moderate career track spanning 35 years as allowed by the Nigerian Labor Laws. All figures are in Nigerian Naira and the tax laws applied are those prevailing at the time of writing this article. 

I assume a scenario where a graduate finished school at about 23 years after the hurdles of JAMB and University strikes. I have also tried to calculate the present value of future earnings. To all non finance readers, this is simply determining how much N1 in the future is worth today. 

Please note that this is not an authoritative salary guide. Take a look at the table below.

YearAge Gross Pay TaxPensionNet After TaxPresent Value
123 1,500,000  97,125  120,000  1,282,875  1,282,875
224 2,000,000  157,500  160,000  1,682,500  1,463,043
325 2,500,000  226,625  200,000  2,073,375  1,567,769
426 3,500,000  378,875  280,000  2,841,125  1,868,086
527 3,500,000  378,875  280,000  2,841,125  1,624,422
628 3,500,000  378,875  280,000  2,841,125  1,412,541
729 4,000,000  455,000  320,000  3,225,000  1,394,256
830 4,000,000  455,000  320,000  3,225,000  1,212,397
931 4,000,000  455,000  320,000  3,225,000  1,054,258
1032 7,000,000  962,000  560,000  5,478,000  1,557,189
1133 7,000,000  962,000  560,000  5,478,000  1,354,078
1234 7,000,000  962,000  560,000  5,478,000  1,177,459
1335 10,000,000  1,484,000  800,000  7,716,000  1,442,176
1436 10,000,000  1,484,000  800,000  7,716,000  1,254,066
1537 10,000,000  1,484,000  800,000  7,716,000  1,090,492
1638 10,000,000  1,484,000  800,000  7,716,000  948,254
1739 10,000,000  1,484,000  800,000  7,716,000  824,569
1840 10,000,000  1,484,000  800,000  7,716,000  717,016
1941 13,000,000  2,006,000  1,040,000  9,954,000  804,334
2042 13,000,000  2,006,000  1,040,000  9,954,000  699,421
2143 13,000,000  2,006,000  1,040,000  9,954,000  608,192
2244 13,000,000  2,006,000  1,040,000  9,954,000  528,863
2345 13,000,000  2,006,000  1,040,000  9,954,000  459,881
2446 15,000,000  2,354,000  1,200,000  11,446,000  459,836
2547 15,000,000  2,354,000  1,200,000  11,446,000  399,858
2648 15,000,000  2,354,000  1,200,000  11,446,000  347,702
2749 15,000,000  2,354,000  1,200,000  11,446,000  302,350
2850 15,000,000  2,354,000  1,200,000  11,446,000  262,913
2951 15,000,000  2,354,000  1,200,000  11,446,000  228,620
3052 15,000,000  2,354,000  1,200,000  11,446,000  198,800
3153 15,000,000  2,354,000  1,200,000  11,446,000  172,870
3254 15,000,000  2,354,000  1,200,000  11,446,000  150,321
3355 15,000,000  2,354,000  1,200,000  11,446,000  130,714
3456 15,000,000  2,354,000  1,200,000  11,446,000  113,665
3557 15,000,000  2,354,000  1,200,000  11,446,000  98,839
 354,500,000  53,050,875  28,360,000  273,089,125  29,212,126 


The analysis shows that a total of N354million is to be earned over a 35 year career. With about N50m saved up as pension and about N53million contributed to the development of society through taxes. 

From this analysis, it is clear that certain things are possible in your lifetime. High flyers are also likely to earn way more than this. 

There are many other inferences I can draw from this data but I'd leave you to analyze and draw your own conclusions.

Assumptions

  • Retirement Age of 60 or 35 years of work
  • Current Tax Laws (PITAM 2011)
  • Pension Reform Act 2014
  • Gross Pay doesn’t include non-cash allowances
  • Compound Interest
  • Yields would not drop below 15%
  • Every little chunk can be invested
  • 15% After tax return


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