Your consulting rate has a floor. Here's the formula.

You’ve saved $1.5 million. Now comes the real test.

Can it produce $10,000 a month, or will that pace drain your portfolio?

Most retirees do not get a clear answer until it is too late.

The issue is not just how much you have. It is whether your portfolio was built to pay you, not just grow.

That difference can determine whether your money lasts decades or starts breaking down early.

Sequence of returns, taxes on withdrawals, healthcare costs, and whether the 4% rule still applies all play a role.

Fiduciary advisors created a breakdown showing what drives sustainable income and why the same $1.5M can produce very different outcomes.

If you have $1M or more invested, do not guess.

See How Long My Money Lasts

Learn More

Something I keep noticing in first rate conversations: the number people plan to charge before we run any calculation is almost always lower than what the formula produces. Not slightly. Meaningfully. The gap tends to be 25 to 40 percent. That's not a market knowledge problem. It's a framing problem - and this week is about fixing it.

The formula first, because it's the anchor for everything else this week.

Salary ÷ 2,000 × 1.4.

Divide your annual salary by 2,000 - the approximate number of working hours in a year. That gives you your hourly equivalent as an employee: what your expertise is already worth to someone who has direct experience of your work and has decided to pay for it.

Multiply by 1.4 to account for the overhead you now carry that your employer was previously covering: benefits, payroll taxes, equipment, business development time.

The result is your floor. Not your target. Not your ceiling. The minimum below which you're subsidizing your client's business with your expertise.

A director at $150,000: $105/hr floor. A CFO at $210,000: $147/hr floor.

Here's what the formula doesn't tell you - and this is the part I want to spend some time on this week, because it's where the pricing conversation actually lives.

Clients don't think in hourly rates. They think in problems and outcomes. "How much do you charge per hour" is not the question most clients are actually asking. They're asking: what will it cost to fix this, and is that cost defensible relative to what the problem is costing us?

Presenting a project fee rather than an hourly rate changes the conversation. The floor formula still matters - it tells you the minimum the project should cost. But the presentation is about the scope and the outcome, not the hours and the rate.

A 30-hour vendor contract review at a $105/hr floor: minimum fee of $3,150. You don't necessarily show the client that math. You show them the scope, the deliverable, and the fee. The math is for you.

One more thing I've found useful in these conversations: state the fee and stop talking. Don't qualify it. Don't say you're flexible before they've asked. "The fee for this engagement is $3,500. That includes the initial review, the written findings, and a call to walk through the recommendations." Then wait.

The silence after stating a fee feels longer than it is. Most clients fill it with a question or an acceptance, not a rejection. The instinct to fill it yourself - to soften the number before they've responded to it - is where the unnecessary discounts happen.

Comfortable is expensive. The discomfort of holding the right rate passes. The financial cost of accepting the wrong rate compounds.

One task. This weekend, run the floor formula for your own salary.

Salary ÷ 2,000 × 1.4. Write the result down.

Then compare it to the number you would have opened a client conversation with before doing this calculation.

If there's a gap - and there almost always is - decide which number you're going to use in the next conversation, and why.

Not financial advice. Example only. Your results will vary.

73%.

The percentage of corporate professionals who reported no pushback from the client when they opened a consulting conversation at or above their calculated floor rate.

The formula doesn't make the number easier to say. It makes it harder to argue yourself down from before you've said it.

The book that convinced me most corporate professionals are pricing their expertise at roughly half what the market would actually pay - written by someone who has been consulting for thirty years and has the numbers to prove it.

The core argument is about value-based pricing rather than hourly rates, and it maps almost exactly to what I've been describing this week about project fees and outcome-based conversations.

This week's recommendation is at mycorporatesuperpowers.com/million-dollar-consulting-book-review.

(Affiliate link - I may earn a small commission if you purchase, at no cost to you.)

Comfortable is expensive.

Not immediately. Over time.