If you knew what an hour of your time was worth, you probably wouldn’t be wasting it reading this stupid article. Or maybe you would spend an hour per day reading my brilliant articles. Hmm.
Many of us work for an hourly wage, and others work for their own business where they can calculate their income and divide it by the number of hours they have invested in their income. However, the real value of an hour of your work is more complicated than the immediate result. There are several factors you must consider when making this valuation.
Learning
If you are doing some type of work, are you learning from it? Are you learning skills that will affect the long term success and growth of your career? Or, are you just doing mindless tasks over and over the entire hour? If you are paid $15 per hour, but are learning, then the value of your time would be in excess of $15 per hour. Although it is hard to evaluate the exact long term value of the educational benefit, consider how much extra money you will be making twenty years ago if you continue learning and rise in the ranks vs. if you don’t. You might find that the value of your time might be worth more like $40 per hour when learning is factored in. Although the benefit from the learning might roll in slowly over time, the benefit could be worth hundreds of thousands if you continue learning. You can compare that value to what your money would do in the stock market if you took a higher paying job that didn’t include any learning.
Stress
I feel that my work time is worth $70 per hour based on what I am making now. Of course if I can learn to be a little more sophisticated, my time might become worth $400 per hour very quickly. I keep telling myself that in order to feel better along with multiple pats on the back. However, if I am doing something that involves stress, it really drains me and affects my mood for days to come. For stressful work, I would not want to do it unless it was worth more like $200 or more per hour as it is so distressing!
Long Term Benefits
If you are building a business and cementing ties with mentors, customers, or building a good system, you might not get paid big bucks right away. But, if you pour your love into that business, and keep it going, eventually your hard work might pay off. It is analogous to planting a tree. You might work for years growing the tree before the fruit comes, but when the fruit comes, your revenue will be generous. Base your hourly value on the harvest which might not come right away. Making this type of valuation has to be adjusted for opportunity costs, risks, and other factors. It is not easy to make long term assessments. However, the mark of a capable business person is exactly his ability to do exactly this!
Multiple Tasks Multiple Values
I do all types of things every day. I try to calculate the value of each task. I learned that each task I do has a vastly different value which is why I cut down on doing certain tasks and increased my time investments in the more valuable tasks. Of course, since I run a business, sometimes the payoff doesn’t come right away, but when it comes, it can be a landslide (which is a good thing unless you live in Malibu.)