Opportunity Cost Variables

Annual ROI:Annual ROI:Expected annual return on investments:Expected annual return on investments:
Close Expected annual return on investments:
Enter the annual interest rate you expect to earn on your investments. Please enter as a percentage, but without the percent sign (for .06 or 6%, enter 6).

Hourly wage:Hourly wage:Hourly wage:Hourly wage:
Annual salary: 

Hours/workday: 

Workdays/week: 

Hourly wage: 

Close Hourly wage:
Enter your current hourly wage (the money value of your time), but without the dollar sign or any commas. If you earn an annual salary you can expand the description to display a calculator that will help you to estimate your hourly wage.

# of years:Number of years:Years to calculate opportunity costs:Number of years to calculate opportunity costs:
Close Number of years to calculate opportunity costs:
Enter the number of years to calculate time value of money for. This could either be an arbitrary number of years or it could be the number of years till a significant date is reached (child reaches college age, your retirement age, etc.).

Asset Purchase Variables

Name:Depreciable name:Name of depreciable asset:Name of depreciable asset:
Close Name of depreciable asset:
Enter the name of the depreciable asset you are calculating opportunity costs for. For our purposes, a depreciable asset is considered to be an asset that maintains a portion of its value for more than 1 year, and may include ongoing costs of ownership (energy, insurance, storage, maintenance, repairs, depreciation, etc.).

Own years:# of own years:Number of years you plan to own asset:Number of years you plan to own asset:
Close Number of years you plan to own asset:
Enter the number of years you plan to own the asset. This could also be the number of years you expect the asset to last (useful life). Note that even though a depreciable asset may have a long life span, the technology it is based on may become obsolete much sooner than you expect.

Base price:Base price:Base price:Base price:
Close Base price:
Enter the base price of the depreciable asset, but without the dollar sign and any commas. This should include the cost of all added options and features, but not the cost of financing  which will be addressed in the Finance Variables section.

End value:Salvage value:Value at end of ownership term:Salvage value at end of ownership term:
Close Salvage value at end of ownership term:
Enter the amount, if any, you expect to be able to sell the asset for after owning it for the number of years you entered. Enter as a dollar amount but without the dollar sign and any commas.
This reduction in value during the ownership period is referred to as depreciation. The calculator will divide the total depreciation by the years of ownership in order to arrive at the annual cost of depreciation. In reality, most assets depreciate at a much faster rate in the early years of ownership as compared to the later years of ownership. This is why buying a new version of depreciable asset every one or two years will cost you a fortune in depreciation costs when compared to buying a new version every 10 years.

Sales tax:Sales tax:Sales tax:Sales tax:
Close Sales tax:
If sales tax will be charged on the base price of the asset, enter the percentage here, but without the percent sign (for .07 or 7%, enter 7). The calculator will calculate the sales tax dollar amount by multiplying the entered sales tax percentage by the base price entered earlier.

Misc fees:Miscellaneous fees:Warranty, shipping, appraisal, title fees:Extended warranty, shipping, appraisal, title fees:
Close Extended warranty, shipping, appraisal, title fees:
Enter the total of any miscellaneous fees and charges that would be considered useless if purchased without the asset. Enter without the dollar sign and any commas. Note that this total will not be included in the sales tax calculation.

Total costs:Purchase costs:Total purchase costs:Total purchase costs:
Close Total purchase costs:
This is the calculated total of the base price, the sales tax, and the miscellaneous purchase costs.

Cash pmt:Cash payment:Cash payment:Cash payment:
Close Cash payment:
If you are paying cash for this asset, enter the same amount as is calculated in the Total purchase costs field. Entering an amount less than that will tell the time value money calculator to finance the difference. In either case, enter as a dollar amount but without the dollar sign and any commas.

Financing Cost Variables

Finance:Finance amt:Amount to finance:Amount to finance:
Close Amount to finance:
This the calculated difference between the total purchase costs and the cash payment amount. If the two are equal (you are paying cash for the asset), you can skip this section and move on to the next.

Loan rate:Finance rate:Financing rate:Financing rate:
Close Financing rate:
Enter the annual percentage interest rate you will be paying on the financed portion of the purchase. Enter as a percentage but without the percent sign.

Loan months:Repayment months:Repayment term in number of months:Repayment term in number of months:
Close Repayment term in number of months:
Enter the number monthly payments you will make before the financed portion of the purchase is paid off.

Loan costs:Loan costs:Loan costs:Loan costs:
Close Loan costs:
Enter the total of any loan costs that serve to increase the amount to finance, but that would be worthless without the asset (origination fees, etc.). Note that these will not be rolled into the loan amount for calculating payments, but will be included in the average annual loan costs. Enter as a dollar amount but without the dollar sign and any commas.

Monthly pmt:Monthly payment:Monthly payment:Monthly payment:
Close Monthly payment:
This is the calculated monthly payment derived from the amount to finance, the finance rate, and the number of monthly payments. The calculator will use this result to calculate the interest cost for the ownership period, and to determine if you will have the balance paid off by the time you are ready to sell or discard the asset.

End bal owed:End balance owed:Owed at end of ownership period:Balance owed at end of ownership period:
Close Balance owed at end of ownership period:
This is the calculated balance owed as of the end of ownership period, if any portion of the purchase was financed.

Net proceeds:Net sale proceeds:Net proceeds from sale:Net proceeds from sale at end of ownership period:
Close Net proceeds from sale at end of ownership period:
This is the difference between the entered salvage value and the calculated remaining balance of the loan at the end of the ownership term. If the result is negative it means you will owe that much more than the asset is worth at the time you are ready to sell. This is otherwise known as being upside down in the loan. If the number is positive it means that this is how much will be left after paying off the balance owed from the proceeds of selling the asset.

Interest:Interest cost:Interest cost during ownership period:Interest cost during ownership period:
Close Interest cost during ownership period:
This is the calculated total of the interest paid during the number of years you plan to own the asset.

Annualized Ownership Costs

Energy:
Energy Cost Calculator
Amount: 

Per: 

Annual average: 

Close Energy cost during ownership period:
If this asset will require energy to operate (gasoline, fuel oil, electricity, propane, etc), tap the button on this row to open a form for entering the annual energy cost.

Insurance:
Insurance Cost Calculator
Amount: 

Per: 

Annual average: 

Close Insurance cost during ownership period:
If you expect to insure the asset against loss or being sued, tap the button in this row to open a form for entering the annual insurance cost. If the asset will be included in an existing umbrellatype policy, enter the amount of the premium you believe represents the portion attributable to the asset.

Storage:
Storage Cost Calculator
Amount: 

Per: 

Annual average: 

Close Storage cost during ownership period:
If you are or will be renting a storage facility to house this asset, tap the button in this row to open a form for entering the portion of the rental fee that is attributable to the asset. Technically, all physical assets have a storage expense. After all, the more stuff you buy, the bigger the residence, garage, or storage shed you will need, some of which also will need to be heated, cooled, and/or maintained. Therefore, if this asset will take up space, I encourage you to enter an estimate, no matter how small.

Maint/repair:Maint/repairs:Maintenance & repairs:Maintenance & repairs:
Maintenance & Repairs Cost Calculator
Amount: 

Per: 

Annual average: 

Close Maintenance & repair cost during ownership period:
Tap the button in this row to open a form for entering the amount you expect to spend on maintaining and/or repairing the asset. This is the periodic amount you should be setting aside in an asset repair and maintenance account  along with all of the periodic amounts to cover all of your existing depreciable assets. Everything that can break most likely will. But as long as you prepare for these expected events, the thing that breaks will not be your budget.

Lic/permits:License/permits:License and permits:License and permits:
License and Permit Cost Calculator
Amount: 

Per: 

Annual average: 

Close License and permit cost during ownership period:
If this asset requires a periodic purchase of a license or permit, tap the button in this row to open a form for entering the annual license and permit costs.

Prop tax:Property tax:Property tax:Property tax:
Property Tax Cost Calculator
Amount: 

Per: 

Annual average: 

Close Property tax cost during ownership period:
If this depreciable asset is a building, tap the button in this row to open a form for entering the property tax amount attributable to the asset. While most people do not consider buildings to be depreciable assets, unless they are made of an indestructible alloy, father time will see to it that they will eventually need to be replaced. Sure, your property as a whole may increase in value (or may drop in value), but all buildings come with ongoing costs of ownership which serve to nullify any appreciation in property values that may occur (plus, property value increases also result in higher taxes).

Sales tax:Sales tax & misc:Sales tax and misc purchase costs:Sales tax and miscellaneous purchase costs:
Close Sales tax and miscellaneous purchase costs:
This is the average annual cost of sales tax and miscellaneous purchase costs over the course of the ownership period.

Loan costs:Int & loan costs:Interest charges and loan costs:Interest charges and loan costs:
Close Interest charges and loan costs:
This is the average annual cost of interest charges and loan costs over the course of the ownership period.

Deprec:Depreciation:Depreciation:Depreciation:
Close Depreciation:
This is the average annual cost of depreciation over the course of the ownership period.

Total costs:Total annual costs:Total average annual ownership costs:Total average annual ownership costs:
Close Total average annual ownership costs:
This is the total average annual cost of all costs associated to owning the asset.

Calculate Opp CostsCalculate Opportunity CostsCalculate Opportunity Costs of DepreciableCalculate Opportunity Costs of Depreciable 
Opportunity Costs

Single costs:Single term costs:Total ownership costs for single term:Total ownership costs for single ownership term:
Close Total ownership costs for single ownership term:
Based on your entries, this is how much you will spend to own this depreciable asset for the number of years you plan to own it.

Years cost:All years costs:Total ownership costs for entered years:Total ownership costs for opportunity cost years:
Close Total ownership costs for opportunity cost years:
Based on your entries, this is how much you will spend to own this depreciable asset for the number of years you plan to repeat the buying and selling of this type of asset.

Lost interest:Foregone interest:Lost interest earnings:Lost interest earnings:
Close Lost interest earnings:
If you spend the annual average cost to own the asset instead of investing that amount, this is how much interest earnings you will lose over the course of the number of years you expect to repeat this buying scenario.

Money OC:Fin opp costs:Financial opportunity costs:Financial opportunity costs:
Close Financial opportunity costs:
Based on your entries, this is the minimum financial opportunity cost of choosing to spend money to own this depreciable asset instead of choosing to invest the money. Please note that if you have high interest debt that could be reduced or paid off with money saved by eliminating this depreciable asset from your buying habits, then the financial opportunity cost of repeating this buying scenario is actually much greater than the minimum displayed.

Time OC:Time opp costs:Time opportunity costs:Time opportunity costs:
Close Time opportunity cost:
Based on your entries, this is the total number of hours you could take off from work if you invested the cost of buying and owning the depreciable  after the entered number of opportunity cost years have passed. So if there is something you would rather do with the time you spend at work, then the financial opportunity costs would futher lead to personal opportunity costs (good times lost).


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