How Much Are You Worth?
Warren Buffett's thought experiment from his Omaha High School lecture — turned into a calculator. The same logic as chapter 13 of «Marathon», applied not to a company but to a person: future cash flows, discounted to today.
Buffett sets the scene like this: «Imagine I came to you and wanted to buy 10% of your financial future. I'll write you a check today — from this day forward, you give me 10% of everything you earn. How much would you charge me?» He says: minimum $50,000. Which means the whole person is worth at least $500,000 today — and that's «the main financial asset you own».
Cash Flow by Year
Dark column — nominal annual income. Light — same, discounted to today. Time eats future earnings.
Sensitivity to Assumptions
How much your NPV changes when one parameter shifts. The analog of «how assumptions break DCF» from chapter 13.
| Scenario | NPV | Change | Value of 10% |
|---|---|---|---|
| Base scenario | $319 400 | — | $31 940 |
| Discount rate +2 pp | $237 526 | -25.6% | $23 753 |
| Discount rate −2 pp | $448 593 | +40.4% | $44 859 |
| Peak income +25% | $385 363 | +20.7% | $38 536 |
| Peak income −25% | $253 437 | -20.7% | $25 344 |
| Years working +10 | $341 582 | +6.9% | $34 158 |
| Years working −10 | $279 674 | -12.4% | $27 967 |
Why IPI as a discount rate?
The discount rate is your alternative real return — what your money would earn if you didn't have the income stream. IPI tracks the real growth of the US investment portfolio (stocks + real estate + bonds + cash), so IPI CAGR is a defensible long-run real rate. CPI-based real Treasury yields understate this because CPI tracks consumer goods, not investable assets.
Read methodology →What This Experiment Shows
1. The main asset isn't your portfolio — it's you. For most people the PV of future salary is 5–20× larger than their current securities portfolio. The decision «how to use your own 200 hp engine» weighs more than the choice «stocks or bonds».
2. Current earnings ≠ fair value. A student with zero income today is worth $500,000+ if they have a career ahead. Same way Amazon with zero profit in 2000 wasn't worth zero — it was worth future cash flows.
3. Discount rate decides everything. A 2 pp shift in rate changes your fair value by multiples. The same sensitivity breaks any company DCF when the Fed moves rates.
4. Time is a double-edged sword. Every «frozen» year early in your career is a year when the investor (Buffett) gets nothing. But he's buying the trajectory, not the current flow. Same as the market does with Tesla, NVDA, Eli Lilly: paying for the trajectory, not TTM.