We’ve all heard that one before, but how many of us have sat back and actually thought about what it really means?
Have you? Have you really?
I used to think it was completely idiotic to pay someone that I could do myself, but that was before I really understood the value of my time. A lot of the times, whether its an emotional or a logical decision, time is just more valuable than the money you can pay someone else in exchange for it.
Here’s a simple breakdown.
Let’s say you make $50,000 a year. A nice round figure. So based on that, if I take into account that there are an average of 220 work days in a year (including holidays and time off), I’m looking at $50,000 / 220 days x 8 hours in a day = $28 an hour.
Most people would stop there, but if you think like an entrepreneur, you shouldn’t.
Because you have to take into account that probably half of the time in a typical 8 hour workday is spent on B.S. tasks like phone calls that don’t matter, meetings that never end, impromptu conversations that keep getting longer and longer, and thing after thing that prevents you from getting actual work done.
So in entrepreneur land that $28 an hour turns into $28 x 2 = $56 (assuming an 8 hour day)
So really, if you’re at $50,000 a year, your productive hours are worth about $56 for each hour you work. This means if you can pay someone $56 to save an hour of your time, and you use that time to do something highly productive, you’ve broken even from a monetary standpoint AND gotten twice the amount of work done (one unit of work for what you paid to get done, and one unit of work for what you were able to get done in that hour).
You see, in entrepreneur land these are the hours that actually earn you money. You can’t make money doing things like filing, research, reading emails, cutting grass, and anything else that isn’t helping you bring in tangible money.
If you’re thinking about how much your time is actually worth, if you’re shooting to do truly productive things that make you real money, and assign a value to your time, you have to think in terms of true productivity - or time spent that truly matters towards getting things done and making you money.
Of course that’s the logical side of the argument. There are other things that come into play as well in terms of the amount you’ll pay someone to do something for you. I always say not to make decisions emotionally, but there are definitely some things I’m perfectly comfortable paying someone else to do, and some I’d rather do myself. I’m sure you can relate.
Outsourcing is great, but there’s nothing wrong with doing things yourself from time to time, especially if those things bring you a high level of enjoyment.
How to Use Your Value of Time
Once you find your number, keep it on your mind at all times. Ask yourself is what you are doing equates to either that number or that emotional or social tradeoff (ex. spending time with your family). If not, find a way to eliminate it or outsource it. Only work on things that really matter to your bottom line, or are really valuable to you.
This is going to help you think bigger in terms of what you’re actually worth. It’s going to help you bill more for your time. It’s going to give you a better self-image, it’s going to help you spend time on things you really want to do, and eventually this will manifest itself into a larger amount of success and happiness for you.
If you do this, you can really skyrocket what you can get accomplished each day, you can really add to your bank account, and you can really add to your level of life fulfillment