Review: BBT S2E14 The Financial Permeability - Part 2

Part 2 - Sheldon’s Financial situation in Season 2

Penny’s money “troubles” are frequently discussed and sometimes paraded for humorous effect. However, what is perhaps more interesting about this episode is what Sheldon says about his own finances.

“My expenses account for 46.9% of my after-tax income. The rest is divvied up between a small savings account, this deceptive container of peanut brittle and the hollowed-out buttocks of a superhero action figure who shall remain nameless for his own protection. Or her own protection.”

Let’s put together some estimates …

Income assumptions

Glassdoor reports that a theoretical physicist at Caltech make around $190K per year[1]. Given Sheldon’s statement is relatively early in the show run - season 2 out of 12 total seasons - this estimate could be accurate given Sheldon’s experience and apparent stature in his field of study. Tax estimators online such as give an estimate of $123K after state and federal taxes. However, given that Caltech provides a deferred compensation plan (similar to a 401k) and health benefits [2], it’s possible that Sheldon could contribute 10% before tax to the retirement account and pay roughly $4k for his assorted health benefits such as health, dental and vision. After adjusting the before tax earnings to $170k, this leaves a nice round $110k after taxes and benefits are removed.

Given these relatively simplistic assumptions, this would make Sheldon’s expenses $51,590, and his savings would be $58,410 - roughly $4300 and $4800 respectively per month.


If we assume that all of his expenses including rent, food, utilities, shopping et cetera all add up to these numbers, that leaves a significant amount of money that Sheldon is stashing into various places around the apartment and a “small” savings account. Given we assumed above that Sheldon would be investing already into a retirement account, he states that he is putting the remainder away for a ‘rainy’ day or fusing his skeleton with adamantium like Wolverine.

Investing projections

Accepting Sheldon’s age of 27 in the first season [3], this would make him roughly 28 at this point. If in season 2 Sheldon started saving that monthly $4800 amount in an individual retirement account (IRA) with an average annual return of 10% and assuming no other changes, he would have $1.1 million by the time he was 39 in 11 years, soon after the last season of the show. This amount is not including the roughly $19k per year put into the 401k like account, which if we assume started 4.5 years earlier and continued for the same 11 years (15 years total) would have grown to $650k, not including the deposits made by his employer. The employer contributions to the base retirement plan could be an average of 9% of his pay, roughly $17k per year or $1425 per month, and may have grown over 15 years to $590k. The sum total of all three of these would be: $2.3 million at age 39. Without investing the ‘extra’ money saved to an IRA starting in season 2, he would only have $1.2 million from the employer contributions and his own contributions to the university savings plan.

Any conclusions?

Sheldon characterizes this ‘extra’ money as: “This is money I’m not using.”

Clearly Sheldon is extraordinarily intelligent. However, he most definitely is not clever with how he thinks about money. Of course, it is this juxtaposition amongst other traits that endears his flawed character to us along his career journey.

Why is this important? Simply because the future is not known. Sheldon may not be able to continue his job until 65 years old. He may become sick and need money to cover expenses, or the expenses of a sick loved one. Making the most of what we have is an important goal for all of us.

The question for the reader is: Do you have any money that you are not using?

If so, today is the day to put it to work for your future.



Popular posts from this blog

Reflection on Criticism

Review: BBT S2E14 The Financial Permeability - Part 1