CPA Lars has ruminated in recent weeks on the reasons wealthy people aren't jumping on the opportunity to make large tax-saving gifts. Part of it, he thinks, is concern about having enough for the long haul.
Lars has a conversation with a banker friend that tweaks his view a little. He likes having his view tweaked. They're talking about the phenomenon and the benefit of working longer. It goes something like this: investment yields are low, and this makes dollars from working more significant. The banker puts it this way: if a person can make say $150,000 working, what's the equivalent of that in a bond portfolio? If bond yields are four percent, it would take about $4 million of them to produce the $150,000. So in a very limited sense working one more year is like having millions invested.
Lars realizes this is just one perspective; for instance at the end of the year the investor would still have the bonds and the worker wouldn't have them. But the idea causes him to calculate in another way. What does it buy to work another year? Is it a double benefit, a twofer?