[Quitting Series 2/5] The Finance of Quitting: How Simple DCF Revealed I'm Worth More Out Than In
The brutal math behind why my paycheck isn’t enough anymore.
Part 2 of a 5-Part Series: The Quitting Series
New drops weekly.
The Illusion of a "Good Salary" and Who You Are
$200k base plus bonus looks impressive on LinkedIn. It feels like success. But here's the uncomfortable truth:
No matter how fast it grows, salary grows linearly, while life expenses compound exponentially.
Inflation and taxes erode purchasing power faster than you think.
And every year spent climbing the ladder carries enormous hidden opportunity costs.
For years, I believed I was building security. But when I finally ran the numbers - just like I would for a commercial or marketing business case - the reality hit me hard.
1. The Simple DCF That Broke the Illusion
To evaluate if quitting was financially rational, I ran a simple Discounted Cash Flow (DCF) model to value my future after-tax earnings:
Key assumptions:
Discount rate: 7% (inflation + opportunity cost)
Career horizon: 35 more uninterrupted years
Performance trajectory: Mid-to-high achiever
The result?
The entire stream of my remaining lifetime income - after tax - has a Net Present Value (NPV) of roughly $3M at age 30. And that's before deducting living costs. Realistically, this number gets eaten alive the moment life kicks in.
This means if someone hands me $3M in cash right now, I could quit immediately, never look back, and still break even - while bypassing decades of stress, burnout, inflation, and tax brackets.
But hardly anyone runs this math. Most people just look at their annual salary and assume it’s the smart, safe path. You don’t have to run these numbers yourself - your figure likely won't be too far off from mine (depending on your age). This is your personal fair value, your labour’s worth today.
So if you're ever stopped by a TikToker asking you,
"How much would it take for you to quit your job right now?"
You now have your answer.
It’s probably lower than what you have hoped for, but higher than you’re willing to admit - me included.
Here's the same calculation run for three typical corporate profiles. For simplicity, this model assumes continuous employment without factoring fringe benefits, career breaks, illness, or early retirement. It excludes all forms of saving/investment and unrealistically holds FY2024-25 Australian tax rates constant.
To illustrate, here’s the same model applied across three typical profiles:
And here is the result:
Insights from the graph:
Time humbles everyone:
Without applying discounting, gross salary curves show Super High Achievers visually taking off and outpacing their peers. However, when factoring in the time value of money, the gap flattens. After 44 years, their $3.1M NPV is only 2x that of a Mid Achiever - not the dramatic payoff you'd expect given their monumental sacrifices.The gap isn’t as big as it looks:
The Mid and Low Achiever NPVs are separated by just ~$300k. A gap easily closed via one strategic job-hop or side hustle.Inflation is the silent killer:
A seemingly large future salary rapidly shrinks when adjusted for inflation and discounting.Mid Achiever’s quiet edge:
A pragmatic sweet spot - balanced returns with far less emotional and physical toll.Irony of the Low Achiever:
The Low Achiever might be playing the sharpest game. Deliberately putting in low effort might free up bandwidth for alpha-seeking strategies (coming in Part 3).
And here’s the kicker:
Even this Super High Achiever profile assumes an idealised, burnout-free, politics-free climb straight to the pinnacle of corporate success - something even the most driven, top-tier achievers rarely experience.
In reality, the path to the top is incredibly demanding, unsustainable, and often damaging to physical and mental health. Consider that these Super High Achievers sacrifice countless hours away from loved ones, battle constant stress, and regularly endure grueling 12~14-hour days. Yet, their NPV ends up only twice that of their Mid Achiever peers.
It begs the question:
Is twice the financial reward truly worth exponentially more personal sacrifice - especially in a high-tax country where the government takes the top slice anyway?
Especially considering these hyper-ambitious individuals make up less than 5% of the workforce (my guesstimate), highlighting how disproportionately difficult their path truly is. The rest of the workforce clocks out at 5pm and sleeps better for it.
Makes you wonder if the juice is really worth the squeeze.
Note: By “achiever,” I meant it strictly in a corporate context. This isn’t about self-worth (more on this in Part 4).
2. Seek Alpha, Not Beta - The CAPM Angle
Let’s borrow from finance again.
Throughout this series, I'll reference alpha and beta - let's quickly unpack these finance terms.
CAPM Refresher:
Expected Return = Risk-free rate + β × (Market return - Risk-free rate)
Simply put:
Beta (β) measures market-correlated risk.
Alpha (α) is the excess return above the expected market return, achieved through skill or insight. It represents the reward for navigating uncertainty and taking calculated risks that outperform the norm.
Corporate Life = Low Beta, Minimal or Negative Alpha
CAPM assumes investors are compensated for taking market risk, yet corporate careers provide virtually no market premium. They're low-beta - offering predictable, steady paychecks - but come with modest, capped returns and minimal opportunity for alpha (excess returns).
Worse - if you’re good, you get more work. Not more money. And in fact, burnout, unpaid overtime, and constant stress can drive your alpha negative, meaning you're actively losing value compared to the broader market. You're essentially stuck holding a low-beta asset that doesn't even keep pace with inflation, let alone offer real growth.
Entrepreneurship = High Beta, High Alpha Potential
Starting your own venture is high-beta: volatile, unpredictable, risky - but it offers asymmetric upside potential. It’s like reallocating from government bonds into growth stocks.
You might fail.
But if you win? You win bigger than any bonus ever written into your contract.
Given inflation, linear salary growth, and burnout, reallocating your "capital" (your time, energy, and skill) into higher-beta, alpha-rich opportunities isn’t reckless - it's logical.
And my mission now is to identify - and seize - those alpha-rich opportunities immediately. Ones that truly align with my goals and values.
By staying in corporate, you’re not just holding a low-beta asset, you’re holding one that erodes alpha, quietly and professionally:
Salary growth capped
Inflation and tax shaving off returns
Scope creep, stress, and burnout compounding daily
You’re penalised for being good - rewarded with more responsibility, not more reward (more on this paradox in Part 3).
Alpha opportunities lie in:
Strategic job-hop
Investing (property, equities, yourself)
Building something of your own
But all of these require bandwidth, time, and energy - resources I have in abundance but are unfortunately tied up in the corporate grind. That's exactly why I'm now actively reclaiming my freedom.
Closing Reflection: The False Safety Net
Corporate job is a "safe" asset yielding below-market returns with escalating hidden risks. If I managed my life like an investment portfolio, corporate life would be a low-yield, long-duration bond being eaten alive by inflation.
I can’t unsee the math now.
And that’s why I’m walking away.
Next, in Part 3, I'll reveal how game theory exposes corporate life as a rigged, lose-lose game - and why the smartest move is to defect - and why smart people still stay in the game.
⚠️ Disclaimer:
All views and opinions expressed in this post are my own, derived from personal reflections and broad observations of market and career trends. They are not directed toward any specific company, employer, or individual, past or present. This content is intended solely for educational and informational purposes and should not be construed as financial, career, or professional advice. Always conduct your own analysis or consult with a professional before making significant career or financial decisions.