Today I have shared this concept with one of my friends about the limited value of income as opposed to time, which is the tombstone principle of time management or personal development ideology.
I used the concept as presented by [Timothy Ferriss][4hww] in various talks to illustrate one application of your own hourly rate. I think the illustration would be starking enough to rethink about your concept of income and working overtime. (also as a very good reminder to myself :))
Now, assuming you are a highly paid but overworked personnel, overworking yourself to a schedule of 12 hours a day, 6 days a week. You earned a handsome salary of $8000 with an additional management incentive of 2.5 months for your good performance and effort. Doing the math:
- Time spent (based on 50 working weeks): 50 x 6 x 12 = 3600hours/year
- Yearly salary: $8000 x 14.5months = $116,000/year
- Hourly rate: $116,000/3600 = $32.22/hour
Now, under normal working average of 8 working hours a day, 5 days a week schedule, your actual monthly pay will only be a mere $53701! That’s essentially means a difference margin of close to 49%!
I’m leaving the interpretation of the math and illustration above to you; but really I hope you’ll do the math with your own situation and ask yourself what the extra hours actually meant to you. If the time taken away from you costs you the very things that you hold dear to, like your family, dreams or even just leisure, it’s really time for you to sit down and rethink your life.
Here’s a portion of morals of the story that flashed into my mind when I think about it:
- Time is your most valuable asset which cannot be replaced or reclaimed. By all means invest your time wisely. Exchanging your time for money is counter-productive if it makes you exhausted and unhappy.
- It’s your life, it’s ultimately your responsibility to keep your house in order. Should you feel that this situation is hindering your other pursuits or aspects in life, by all means take necessary actions: learn how to delegate your work, renegotiate your working conditions or contract, ask to get paid by results, quit the damn job… or whatever it takes to reclaim your control and happiness.
- Should you love your job a lot, you didn’t care about the overtime and you are a solid performer, it may be a good idea you are paid based on your results. Starting your own business would also be a good option to consider.
- Here’s something less obvious: Live well below your means, because time and good financial footing are strong assets that contribute to your freedom.
- Another less obvious lesson: Learning how to leverage your time and resources are key towards achieving success. Greatly recommend you read [Four Hour Work Week][4hww] to get my point here.
What’s your interpretation of the situation above?
The calculation formula: $32.22 x 50 weeks x 5 days x 8 hours / 12 months [4hww]: http://www.fourhourworkweek.com/blog/ ↩