Invoice yourself – What are you (really) worth?(dontgetburnedblog.com)
dontgetburnedblog.com
Invoice yourself – What are you (really) worth?
http://dontgetburnedblog.com/invoice-yourself/
11 comments
I'd go a little further and say that the actual gain is the value of your productive output minus what you had to pay for it.
If you're producing $100 worth of value, but you spent $100/hr to get that time then you're not really gaining any ground (and you won't be able to improve your leisure time). If you produce $100 worth of value and spend only $10 to get that time, then you're producing value that can "spend" to enjoy life.
If you're producing $100 worth of value, but you spent $100/hr to get that time then you're not really gaining any ground (and you won't be able to improve your leisure time). If you produce $100 worth of value and spend only $10 to get that time, then you're producing value that can "spend" to enjoy life.
I think I agree with the gist of what you're saying, but saying "Time has no cash value" is overly broad and a bit silly. Do you think interest rates only exist to hedge against inflation?? What is the value of angel investors??
I think you're confusing the time value of money with the cash value of time :)
Interesting premise, I don't think people put enough stock in their self-worth. I was having this discussion with someone this morning. We talked about how mothers, after 20 years of raising children, have very low self worth because they have not "done" anything. This is a cause of media and society in general, with the importance of Ivy's and pretigious careers.
It's also very interesting when you begin thinking of how it affects other people's value or money.
In his example of bargain hunting and collecting coupons, he spent 8+ hours to save $20, which he realized was a poor return on his money. (That must have been some serious bargain hunting). Not only that, if he purchased some goods for $20 less than he would have without the coupons, then the vendor ended up $20 poorer than he would have. So he spent 8+ hours to effectively transfer $20 of value from the vendor to himself, which is even worse than spending 8 hours to create $20 of new value.
It certainly depends on how you view other people's money and value compared to your own.
In his example of bargain hunting and collecting coupons, he spent 8+ hours to save $20, which he realized was a poor return on his money. (That must have been some serious bargain hunting). Not only that, if he purchased some goods for $20 less than he would have without the coupons, then the vendor ended up $20 poorer than he would have. So he spent 8+ hours to effectively transfer $20 of value from the vendor to himself, which is even worse than spending 8 hours to create $20 of new value.
It certainly depends on how you view other people's money and value compared to your own.
Don't forget that a penny saved is not truly equivalent to a penny earned, because saving a penny actually requires earning enough to cover taxes and the extra costs (travel time, gas, etc) you incur to earn it. Saving $20 on a purchase is equivalent to earning $30-40.
I find pieces like this often leave out a very important piece of the equation: what you do with the time you gain. The value of your time isn't constant.
You haven't gained much if you pay someone $20 to mow your lawn because you think the hour you would spend is worth $100, but then spend that time watching soaps on TV. Is an hour of soaps worth $80 for you? Is that relaxation you need in order to $80 more productive later? I've seen people justifying purchases and luxuries by saying, "My time is worth it." but then they waste the time on other busy-work and still don't think they have enough time in their day.
You haven't gained much if you pay someone $20 to mow your lawn because you think the hour you would spend is worth $100, but then spend that time watching soaps on TV. Is an hour of soaps worth $80 for you? Is that relaxation you need in order to $80 more productive later? I've seen people justifying purchases and luxuries by saying, "My time is worth it." but then they waste the time on other busy-work and still don't think they have enough time in their day.
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Offtopic, but am I the only one who finds it incredibly annoying when blogs like this disable the back button by overwriting the last item in your history?
Never looked at it this way... Great new way of thinking!
This is exactly why I will NEVER work for an hourly wage! Im worth way more than anyone could pay me... I create my own value!
Funny -- I have been working for an hourly rate the past year or so, having been salaried for all my jobs previously. Being paid by the hour really opened my eyes to the "cost" of almost everything else I do. Why, just responding to this post "cost" me a couple of dollars....
You can calculate the hourly wage equivalent for all monetary-value creating activities.
You probably need time to create that value... Halfway agreed.
Yes yes yes! finally we are getting somewhere. I LOVE THIS
People waste so much time everyday. Maybe if we looked at time differently we'd all be better off
If you're Warren Buffett, a dollar when you were 20 years old could have been worth $10m now. If you're building a startup, saving every penny you can on ramen noodles might give you an extra month you can survive with no funds. Thinking "I'm worth so much more than this" because you could be charging $100 an hour for Java development to some enterprise while you're coding The Next Big Thing is a disconnect.
Time has no cash value. Productive output has cash value.