Buying back your Time at a discount.

“Whoa, what’s going on today, why is the line so long?”

The lunch line was out the door. It looked like “lineCon” at Defcon where you’re not quite sure there is a front to the line. Wondering if anyone knows what line they are in?

“It’s 5 dollar meal day, you save 7 bucks on a $12 meal.”

My friend loved a good deal and often hunted them down for our lunch time, and this day was no different. After all, who doesn’t love a good deal!

“Not a chance, let’s go somewhere else. This line is at least 30 minutes long, maybe longer.”

However, I value my time far more than money so standing in line wasn’t an option.

“Why?, where else are you going to save 60% on your lunch!?”

My friend had a point. Who can say no to a killer deal?

“You’re not saving anything; you’re actually spending more if you consider your time to be valuable”

The confusion on my friends face was priceless. He had never considered his time having monetary value. So much so that he pushed back on the concept.

“Look, I could spend all day here, the fact remains that my $12 meal is $5; saving nearly 60%. I still don’t see your point”

I don’t think my friend is completely wrong in this line of thinking.

However, I’ve been obsessed about the value of time for the last 10 years and it’s changed my behavior extensively. Let me explain.

The Value of Time

If I were to ask you how much your time is worth, what would you say?

You will likely have one of two answers: A proud amount that you feel your time is worth and your current wage.

I would like to think my time is worth $1000 an hour, but if I can’t find someone to pay me it consistently then it makes no since to use that figure to make life decisions.

So while it’s imperfect, I would suggest using your “value of time” equal to what your current employer and your side hustle(s) net you as an hourly figure.

As an example:

Employer Pay: $42,000 Salary on a 40 hour week
Side Hustle: $500 per month on 3 hours a week

Total Yearly salary: $48,000 at 43 hours a week

Hourly Wage = $48,000/52(weeks)/43(hours a week)

Hourly Wage = $21

Enjoyment vs Punishment

I broke this concept down to my friend and before I could get to how to modify such a blunt tool, he threw shade:

So is that how you view our conversations?; Wasting a few dollars talking to a friend? If you look at everything you do as money spent you may find all you do is work! And that surely isn’t the point of a healthy lifestyle.

This is a fair point, and definitely misses the overall goal I’m trying to accomplish.

No, it’s not to be used so bluntly. This is a complicated decision structure I’m trying to simplify using the value we know from an objective point of view. The algorithm I use includes a modifier for Enjoyment vs Punishment. So If I love doing something, I may use a factor of 3 to balance the value equation.

At this point, I knew my friend was confused. I had to break it down with the example we went through.

Okay, Let’s pretend you make $20 an hour and the line we avoided today was indeed 30 minutes. Making your value of time in the line $10. Now add that to the cost of the meal ($5) and you have $15 on a $12 meal. See you didn’t save $7 you spent 30 minutes of frustration in the hot sun and ended up with a $3 dollar deficit.

My friend doubled down

Dude, the fact remains my bank account would have 7 more dollars if we went there. Regardless of how much time I spent waiting to save.

I obviously wasn’t making my point clear.

Yes, and if you enjoy spending time in lines, than the $7 is worth it. However, if you don’t enjoy spending time in lines than this logic provides a somewhat objective view of your time and money. Let me explain the algo…

The algorithm

I’m obsessed with time. Time is our most valuable asset. It’s one of the few things money can’t buy. But before we jump into the algorithm, let’s define how to obtain your per hour value:

Hourly Value of Time = (Salary / 52 weeks / Avg hours worked each week)

Multiple or Divide your hourly rate by a factor of:

• 1, if you would do the task for your current hourly pay.
• 2, if you would only do the task if you got twice your hourly rate.
• 3, if you would only do the task if you got three times your hourly rate

Example: Spending vs Doing

I don’t like yard work. So when I came to the same conclusion most homeowners come to; either I have to do it, or I have to hire someone.

I asked myself :

I don’t want to do yard work but is it economical to pay someone? Or should I suck it up and do it myself?

When I got bids for my small yard it was $150 a month for a visit every other week. Which sounded like a good deal. So before I hired someone I cleaned the yard and found It took me 4 hours; totaling 8 hours for a month’s worth of yard work. So let’s go over the math…

The Simple math

Without the enjoyment/punishment factor this is very dry and simple. I need to make more than $18.75 an hour to make it worth while to pay for the service:

$150 / 8 hours= 18.75 per hour

To elaborate, if I make less than $18.75 an hour it would be better for me to do the work myself. If I make $37 an hour than I’m buying my time back at a nearly 50% discount.

Figuring the Factors

Now I said I don’t like yard work. But let’s say I hate it and the only way I would do it is if you paid me 3 times my salary.

150/8 = 18.75 per hour

18.75/3 = 6.25 an hour

If I hate it, I really only have to make more than $6.25 an hour to justify not doing the work myself.

What if I really love doing yard work.

18.75 * 3 = 56.25 an hour

If I really like or even love doing yard work, I would reverse the math and recalculate the value. With the new enjoyment factor added, I need to make more than $56.25 an hour. Otherwise its mathematically a waste of time.

When not to use this

Before you start picking the logic apart, if you really really enjoy doing something you shouldn’t rely on an algorithm to make the decision; go do it.

The goal here is to help give you another way to look at decisions in your life that you struggle justifying.

How I use it

Anytime I have a large project or a long-term service, I run through this algorithm. For instance, I enjoy IT and security work so I do 100% of the work around the house.

I’m lucky enough to have a hot tub and the cost to hire someone didn’t pass the algorithm so I take on that task as well.

However, it has helped me justify supporting a company doing some of my services like yard work and house cleaning to free up time for myself to focus on the things I enjoy doing. Ultimately removing stress from my life.

What changed in my life?

As a life hacker, I used to do almost everything myself. The curiosity and tenacity to figure anything out made it a fun challenge. However, I found myself overstressed and always behind.

I also hated the idea of hiring someone to do remedial tasks; It felt like a waste of money. Especially, since I had the knowledge and capabilities.

When I built this algorithm it changed my life. I found myself focusing more on the things I enjoy doing and farming out the stuff I hate doing.

What other decisions were effected?

I started to look at everything in my life and started to record how long it took me to do everything.

As an example, it takes me:

• 140 hours to obtain a new certification
• 40 hours to prepare for a public presentation
• 120–200 hours to finish a video game
• 120–240 hours to finish a Movie/TV series

I went on to calculate how much free time I have in a given year. I cut that time in half and spend it on improving myself in as many categories as I can. The other half is purely for entertainment and time with friends and family.

Budgets

Your budget is going to play the biggest role in this scheme. However, think of your time as investments. If you get the yard service make sure you are off setting it by learning, growing, or leveling up your skill set.

Remember: You are buying back your time at a cheaper rate.

Last thoughts

I hope this article gives you some tools to make more objective decision making with your time. My goal is to get everyone to remember their time is finite, tomorrow is not promised and to keep that in mind when making time based decisions.

Spend your time wisely!