As much as I hate to admit it, we all have a price on our heads in some form.
For most people the simplest way to calculate it is to divide your weekly salary by the amount of hours you work per week and you will have your hourly rate. Here are three ways that this can be helpful.
1. If you can hire someone else to do a task which you are currently doing for a cheaper hourly rate than yours then you should do it with the outcome of making money on the difference.
Tim Ferris’, The 4 Hour Work Week, discusses this in detail and gives you many practical examples of how you can implement it in your life. For me, the biggest realisation of this was when, my now wife, Sarah, very early on in our relationship convinced me that we should get a cleaner.
As an ex-Army Officer I was a good cleaner and I didn’t mind doing it. As soon as she pointed out that my time was worth more than the money spent on a cleaner and that I could be spending that saved time working more or even better, spending time with her, I was easily convinced.
With the aid of the internet it is pretty easy to work out how to do most things yourself however people enjoy doing different things. We utilise a variety of businesses to do things for us that we could do ourselves but we don’t want to. For example, we utilise Grow My Team to find and manage amazing staff in the Philippines for us, we utilise Daily Blooms to pick and deliver $30 flowers for us and we even outsource our physical health and fitness training to KX Pilates.
2. By knowing your ‘hourly rate’ you might start valuing your money more and not waste it on things which you don’t actually need or appreciate.
One of my biggest gripes is how many people just casually accept parking tickets as part of life without seeing the true value lost. I always advise my clients to consider that each time they get a parking ticket that’s a few hours wasted, or better still, money that could have been put towards extra super contributions or their next trip overseas.
Another ‘waste’ trap is spending money on instant gratification items, which online shopping has made much easier to do. Next time you go to make a quick purchase, stop and measure the value of your purchase against your hourly rate.
I also urge you to question your motivation for buying. I have seen clients develop dangerous spending habits because they’re unhappy with an area of their life which in turn means they have to work harder and longer to keep up with the spending. Which leads me to my third point;
3. Are you in the right profession?
You might think you have a really high paying job but it’s important to take the time to review how your job makes you feel and whether the ‘dollar value ’ is worth the stress and long hours. Over the years I have worked with a number of high earning clients or heard stories of people being unsatisfied with their occupation.
Given many were spending 40-45% of their week working, not only did their personal hourly rate drop but their overall happiness and well-being also suffered. Sarah and I started our first business, Wealth Enhancers, as a way to do something that we loved and help inspire others to do the same.
I really encourage you to start looking at where you are spending your time and ask yourself, are you getting value for it? Good luck with the many changes you may need to make. It will be worth it!
Finn Kelly is CEO and co-founder of Wealth Enhancers.
Image: János Balázs, Flickr