What's your time worth?

Naval Ravikant said: “"People don’t pay with money. They pay with hours of their life."

This goes for whatever it is you’re after. If it’s money you want, you’ll work on your business and read the Growth Bulletin. If it’s relationships, you’ll spend time with people. Etc. 

We often want it all, but quickly realize that isn’t possible. To help you make your choices, it helps to have an idea what your time is worth.

It will help you answer questions like: 

• Should I clean my flat or hire someone else to? 

• Should I spend 5 hours building SOPs for this new tool? 

• Should I spend Saturday evening working on my side hustle or go out with my friends? 

To get the number, retrieve:

A) How much time you work to earn money. This includes day-job, commute time and side hustles. James Clear, author of Atomic Habits, uses RescueTime to measure and categorize his time expenditure.

B) How much money you make. After taxes and work/productivity-related expenditures. 

Your time is worth = B / A.

For example: if you work 2000 hours/year (±8 hours per weekday) and make $100,000/year, your time is worth $50/hour.

Here’s a neat little web app to help you make the measurement. 

You can take it a number of steps further, which James Clear breaks down in his article on the topic. It’s a good read.

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Before you go, here are a few parting thoughts I found insightful from u/Extra_Negotiation on Reddit: 

• Consider how often you will do the thing in the future, and how much you might improve at it (it takes more time the first time)

• There is a variable that is harder to quantify, which is something like "how much variety do I want in my life" "how much do I like doing things for myself" and similar questions. If you can press a button every 3 seconds for $100/hour, there's an amount you'd want to press that button, and an amount you'd want to… do almost anything else.

• Psychological burden — a thing can take only 1 or 2 hours, but if it sits on your list for a long time, getting re-copied over or re-listed, causing stress, this is also it's own energy (and therefore time) sink.

Written by Owen Mulhern