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How much is an hour of your time worth in $?

Discussion in 'Living Room' started by Owlet, 1st Aug, 2015.

  1. Owlet

    Owlet Well-Known Member

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    A few comment in the tight arse thread gave me some food for thought, particularly the comments 'How little value do people place on their own time?', ..wasting an hour to save $10 you have lost the opportunity to make $200' and Skater's valid point 'all well and good if you have the ability to earn $200'.
    So on paper from your JOB whether it be PAYE, business salary or what you charge others for your time - how much is an hour of your time worth in $ as written on paper? (It doesn't include any additional unpaid work your employer/ business may require you to do).

    I'll start $48hr before tax. $38 after tax

    Lack of opportunity for increase in pay within current occupation.
     
  2. CJP

    CJP Active Member

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    make opportunities then to increase your earning ability! learn new skills and knowledge, extra qualifications, become more desirable to the market place. As good old Jim Rohn said, you don't get paid for time, we get paid for value, value we bring to the market place. Person a gets paid $20 an hour and person b gets paid $100 an hour. Evidently, person b does not spend more time at work, but he is 5 times more valuable than person a, to the market place.

    To answer your question, I'll say approx. $90/hr. But I can only earn that if I am at work, and on salary there is no overtime to be paid so that's my cap at this stage. I'm working on other sources of income to replace that so I don't have to work so much if I don't want or job cuts. So when I am at home, and there is things I can do myself to improve the value of our home, like painting, basic carpentry, gardening, landscaping, I do them. I figure my time plus the value add to the property is better than straight out paying a painter or other tradie to do it, helps immediate cashflow. Specialist stuff that is out of my skills set and is a one off i pay a pro to do. Also, things like cleaning and stuff I would pay a cleaner to do because im not making a gain from it, its bloody boring and its just a task to be done. We recently spent 2k on a dishwasher, might sound like a lot of money to start with but over the life expectancy for quality appliance it saves so much time and energy that it is worth it several times over.
     
  3. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    There comes a time when you got to be reasonable spending time on lower value outcomes, however, the reward is not always measured in financial terms.
    Sometimes a sense of satisfaction knowing you accomplished something and are capable is worth much more than money.
    My wife and I would both be valued over $200/hour both working full time, but that doesn't mean we should outsource every activity that generates less than this amount, or you would not experience much in life.
     
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  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    This question extends well beyond a salary for those who are self employed. I know how much I pay myself, but I also know how much I earn for my business. There's a big difference between the two numbers and often you'll find your employer expect you to be earning about 3-4 times your own salary.

    You can then give consideration to how much your time is worth to someone else. They may be willing to pay $2000 / day for you to do some IT work for you, but there's no way your partner is going to pay you anything for you to wash the dishes.

    It could be argued that parenting is an incredibly demanding job, 24 hours a day, every day of the year, but we complain that we pay taxes contributing to paid maternity leave and Centrelink benefits.

    An hour of a persons time is subjective. Sometimes the most valuable time of all is when you're spending it on yourself and nobody is paying you anything for it.
     
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  5. spludgey

    spludgey Well-Known Member

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    Anywhere between $0 and $200, depending on how much I want to avoid the task at hand.

    Similar to Ace really, but sadly, I don't make anywhere near $200 per hour at work!
     
  6. Bran

    Bran Well-Known Member

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    SON: "Daddy, may I ask you a question?"
    DAD: "Yeah sure, what is it?"
    SON: "Daddy, how much do you make an hour?"
    DAD: "That's none of your business. Why do you ask such a thing?"
    SON: "I just want to know. Please tell me, how much do you make an hour?"
    DAD: "If you must know, I make $100 an hour."
    SON: "Oh!(With his head down).
    SON: "Daddy, may I please borrow $50?"
    The father was furious.
    DAD: "If the only reason you asked that is so you can borrow some money to buy a silly toy or some other nonsense, then you march yourself straight to your room and go to bed. Think about why you are being so selfish. I work hard everyday for such this childish behavior."
    The little boy quietly went to his room and shut the door.
    The man sat down and started to get even angrier about the little boy's questions. How dare he ask such questions only to get some money?
    After about an hour or so, the man had calmed down, and started to think:
    Maybe there was something he really needed to buy with that $ 50 and he really didn't ask for money very often. The man went to the door of the little boy's room and opened the door.
    DAD: "Are you asleep, son?"
    SON: "No daddy, I'm awake".
    DAD: "I've been thinking, maybe I was too hard on you earlier. It's been a long day and I took out my aggravation on you. Here's the $50 you asked for."
    The little boy sat straight up, smiling.
    SON: "Oh, thank you daddy!"
    Then, reaching under his pillow he pulled out some crumpled up bills. The man saw that the boy already had money, started to get angry again. The little boy slowly counted out his money, and then looked up at his father.
    DAD: "Why do you want more money if you already have some?"
    SON: "Because I didn't have enough, but now I do.
    "Daddy, I have $100 now. Can I buy an hour of your time? Please come home early tomorrow. I would like to have dinner with you."



    I read this only last week, and nearly dismissed it for the first half. But the last line got me badly.
     
  7. Bran

    Bran Well-Known Member

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    I asked a very similar question on SS when I was debating increasing my 4 days a week.

    I'm doing an extra half day for someone else for about $200/hour. This is more than my usual 'wage' but I have dropped it this week - losing this time is not worth it for me. Furthermore, I can do the same work for myself after expenses for 4x this amount, and am in the process of trying to make this happen.
     
    Last edited: 2nd Aug, 2015
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  8. datto

    datto Well-Known Member

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    $24.50

    Yeah, well I am datto.
     
  9. skater

    skater Capitalist Premium Member

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    Not everyone is capable of earning more. This is one of the things I struggle with on this forum is that there are so many high income earners that sometimes it gets a bit condescending towards those that aren't as highly paid.

    Very true! I could have paid a plumber the other day to unclog a toilet while Hubby was at work.....but I did it myself, not because I couldn't afford a plumber, but because I found an easy way for me to do it myself which gave me a sense of satisfaction.

    Yep!
     
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  10. Owlet

    Owlet Well-Known Member

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    That is debate I too have at the moment - well somewhat similar. Stay full-time or work part-time. Hourly rate stays the same, take home work will increase with the extra hours. Is my time worth more than the take home pay? Is that time better spent on research and investment education and avenues that in the long run will bring in more than $38. I really should do the numbers and see how much is really left in my pocket.
     
  11. Owlet

    Owlet Well-Known Member

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    Exactly. I am not capable of earning more because of the industry. There is a cap on income when you reach x level regardless of further study and experience. Being salaried there is no payment for work completed outside of business hours. However, current income is still reasonable and better than a starting salary if I retrained. I can't earn more but I can spend less than I earn by doing things myself - similar to Skater's example and I know the job will be done properly as well.
     
  12. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    Happened to me a few weeks ago.
    58" plasma screen, a few months past the 5 year warranty just stopped working.
    I'm a pretty handy guy and can build anything, but electronics is out of my league.
    I knew the repair place could have done me for any amount they felt I would pay to fix it, and improbably would have paid maybe up to $800 to get it fixed.

    So the TV little LED was flashing about 11 times before switching it self off. A simple Google search of the model and number of flashes reveals its a fan problem, thanks Whirlpool forum...
    Getting the screws off the back panel was a bits of a pain, because there were so many of them. Then I got a can of compressed air from Bunnings and blew I'll the built up dust from all the fans. Had to dismount and unclip some to clean them properly.
    Anyway, it worked, and has kept working.
    Took me about an hour, but the satisfaction of fixing something I thought was well out of my depth was more valuable than any amount of money.
     
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  13. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    Can I ask what industry that is?
     
  14. Bargain Hunter

    Bargain Hunter Well-Known Member

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    Given that we are talking about how much money we trade our time for, I find it interesting that you expressly discount the additional hours that people work within their employment without compensation.

    To me this is critical in determining your real value to your employer.

    If you are paid $2,000 for 40hrs then this is equates to $50 per hour, however if in reality you consistently work 60 hours per week and are only compensated for 40 then your actual hourly rate is $33 per hour. This also does not include time or costs spent getting to and from work.

    Although what one earns per hour is a fairly standard method of determining how much they are willing to trade their time for it is not the complete picture.

    You may have someone who can earn $200 per hour however they are working a lower paid role because it provides them with more freedom to do what they want outside of work.

    Take myself for instance. I will be retiring in the next two weeks and will be earning less than I am currently paid. Will this mean that my time is now worth less, or more?

    Regards

    Andrew
     
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  15. lightbulbmoment

    lightbulbmoment Well-Known Member

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    My hourly rate isnt that great for fifo but its the opportunity where you get to work 70hrs a week to actually make some money that is worth my time.
     
  16. Simon Hampel

    Simon Hampel Founder Staff Member

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    When I first moved to Sydney, I worked for a small IT consulting firm. About a year after I joined, they sold out to a large US-based multi-national IT consulting firm.

    They introduced a bonus scheme for us to try and encourage us to maximise our utilisation (percentage of billable hours per week).

    After initially getting excited about the opportunity to earn quite a bit more than our regular base pay, I calculated the effective additional hourly rate of pay based on the number of hours I would have to work to earn it.

    It came out at around $10 per hour or something low like that ... I used to earn more than that delivering pizzas for a small pizza shop when I was at uni.

    So at that point I decided I would not be trying to earn my bonuses - I would simply do my work and leave it at that. It was only a few months later that I got head-hunted for a much more interesting job, was glad to leave really.
     
  17. HomePage

    HomePage Well-Known Member

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    When you achieve financial independence, opportunity cost becomes irrelevant.
     
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  18. Owlet

    Owlet Well-Known Member

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    On paper - my pay slip my hourly rate is $48.00. Yes they come to that amount by dividing annual salary by 38.5hr work week. If I was to divide my actual hours by my weekly pay it would be a much lower rate. That does not mean I am a worthless person.

     
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  19. Bargain Hunter

    Bargain Hunter Well-Known Member

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    We are more than a pay check.
     
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  20. skater

    skater Capitalist Premium Member

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    No, it most certainly does not, however it means that to your employer you are worth less than $48 per hour that you work.