What is our time worth?
If you make $150,000 dollars per year and work 45 hours a week for 52 weeks, minus 4 weeks vacation and holidays, this equals roughly $70 dollars per hour.
It is essential to know what an hour of your time is worth to the free market. Knowing this will help you make decisions more easily (e.g., buying sliced or whole pineapples), and, more importantly, will allow you to start buying the most precious commodity in the world…time.
Let’s say you don’t enjoy staining your outdoor deck. At your value of $70/ hour, what is the cost for you to stain the deck? If it takes you five hours, that’s $350. Alternatively, you could hire someone to do it completely for $200—if you have the funds it’s an automatic decision—hire that person.
There is an opportunity cost whenever you devote your time to something. The time you would’ve spent staining your deck is now available, it can be redeployed to create $350. Any bid to stain your deck that is less than $349.99 should be an immediate “yes” to outsource it.
This formula seems pretty simple, but even when we are fortunate to have the funds available, it’s difficult to execute. Many of us associate hiring a service to cut our lawn, trim our trees, or clean the house to being “lazy.”
Yet, if I ask anyone if buying time were possible, would they make that purchase? Everyone emphatically answers “yes.” What we just reviewed is exactly that. You’re buying time! We live in an outsourced world. Just because you know how to drive a car doesn’t mean you should always rent a car when you travel. It’s often more economical to take an Uber, especially when you factor in the time that you could be working or sleeping to recharge while your driver takes you somewhere. Billionaires often employ drivers, not because they’re privileged or lazy, but because they know they can make more money working in the back of the limousine than driving themselves.
Buying time is another way to focus. Outsource everything that isn’t essential to what your main focus is as a person, business, or organization.
If you found this interesting, check out The Focus Project.
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