I value my time at $50-an-hour. It’s not a scientific assessment. Noah Kagan values his time at $100 per hour, and he helped found Facebook. I think $50 is plenty for me right now. At my job, I make around $69/hr before taxes. But for purposes of everyday activities, and as a decision-making device, I like to use $50.
What in blazes am I talking about, and what does that have to do with NYC?
Let’s start with a foundational assumption. Yes, we want to increase our earning power, as a either means-to-an-end of putting us in the driver’s seat in our lives (sorry – hacky life coach cliche), or as a side-effect of a business we start/run that we’re passionate about. And when it comes to money, there’s a threshold – the minimum necessary income to not need to worry about money. Below it, the time-is-money equation breaks down, because you need money by-any-means necessary. But for those lucky enough to be above it – or even at parity if they implemented a few hacks – it’s useful.
Here’s an example. I know a guy who very probably makes 120,000-a-year in higher education. He spends 60-70 hours-per-week in the office, in a high-stress, politically chraged environment. Let’s not even count the hours he spends worrying about office stuff or checking his email at home. Let’s just call it 65 hours-a-week. It’s a very simple equation. 120,000/52/65 = $35.50. The guy makes $35.50-an-hour. (Couple of caveats: it’s hard to value the security of a regular paycheck or employer-based health insurance. That’s why comparisons to the freelance world break down.)
Point being – and I’m not the first person to make this point – if you’re not valuing your time by-the-hour, you’re missing a big part of the picture. If you are, you’ll also have an advantage, because everyone else is only looking at the per-year sticker price, but you’ll see value where others miss it.
Something I see a lot of in NYC is the Income/Expenses tail-chase. It goes something like this. You start out at a moderate salary at a job you hate. Eventually, instead of leaving, you take a raise. Magically, your living expenses seem to keep pace with your paycheck. Maybe you take another raise, and/or a promotion that requires you to work extra hours. Your paycheck is more, but somehow now your living expenses are now even more. Sound familiar?
If this doesn’t describe you, don’t sweat it. (And congratulations.) I can introduce you to ten people in my immediate peer group whom whom it describes, and I would have fallen into the same trap, if circumstance hadn’t intervened.
Let’s not get ahead of ourselves. The Paycheck Chase occurs when we don’t decide what our priorities are up-front. We fall into the “I’m working hard, so I deserve to live in a nice house” trap. We get another raise, and decide it’s time for a BMW. Was a BMW a priority for us? Who cares – we have to listen to xyz hours of boss every week so goddamn it we deserve that Beemer. To avoid controversy, a disclaimer: I’m only speaking from firsthand experience. There’s no hearsay here. I am personally acquainted with people who take a promotion, move into a nicer apartment, buy more stuff, take another promotion. Buy a brand name watch or some expensive jewelry. I have no idea if they’re happy. They might be ecstatic. I hope they are. I don’t pretend to know better than anyone what’s good for them. I just know I approach it differently, and I’m happy.
Anyway, I digress.
I like to use valuing-my-time, mostly, as a decision filter. I draw a dichotomy between things I’m passionate about and things I do for money, even though some of the things I’m passionate about make money and I enjoy some of the things I do for money. Here’s a useful process:
- Ask yourself, “would I do this for free”? It’s not as cut-and-dry as it seems. First, let’s dispense with the idea that anything beside food, shelter, quality time with friends and loved-ones, and pursuing our passions is necessary for us to do, at least in-person. That’s why I ask “would I do this for free?” Here are some things I would do for free: musical gigs with my favorite musicians, blog about stuff I like, work out, practice the drums, help others tackle challenges in their lives, walk somewhere on a nice day, etc. All these things are exempt from the usual per-hour-rate math.
- If the answer is “no”, it’s not “necessary” (at least for you to do personally), and you’re lucky enough to have enough money to live, “do the math” to find out whether it’s worth your time. Example: musical gig that doesn’t interest me, for which I have to commute. Time spent learning music + time spent commuting + time spent playing/hanging around waiting to play, etc. = ? Then multiply that by $50. Does the gig pay that much? How about a raise at my current job. Say I was offered an extra $20,000, but I would have to work twice as many hours per week. That knocks almost $20 off my hourly rate, and puts it below the $50 threshold. (I would make exceptions for two reasons: first, if the promotion was an important step toward a career path I had chosen, second if the job was something I was really passionate about.)
Okay – so is all-of-the-above just a trustifarian justification for idleness? Of course not. Here are a few things I’m doing with my time instead of things I don’t want to do:
- Starting and nurturing two businesses
- Learning Mandarin
- Producing a web TV show
- Traveling-the-world and writing about it
BOUNDLESS disclaimers: my two businesses, hardly a year old have made money, just not much of it, yet. I continue to adapt, experiment, and try new things. The web TV show is slow-going, but there are some solid episodes already on the web. So far I’ve made exactly three trips for my travel blog – to Seattle, Cape Cod, and Hong Kong/Taiwan. The blogs are getting traffic, but I haven’t recouped any money from them yet. Not that I need to – it’s a challenge. Point being, I don’t want to portray myself as some sort of globe-trotting renaissance man. I’m an average dude with an average paycheck, who implemented some “hacks” to make my life better. And good thing I’m not Richard Branson or Elon Musk. If I were, I’d be easy to write off as “silver-spooning” my way out of all my problems.
I’ll talk a great deal more about career stuff and resume-building in future articles, but for now, the briefest-of-background.
One year ago, I was at a career dead-end. There was little hope for a promotion, and, as I learned painfully when I attempted to apply elsewhere, the skills I’d spent years to cultivate and hone at my dead-end job were completely unmarketable elsewhere. (This story should dispel, once-and-for-all, any idea that I lucked my way into a great job that I’m now gloating about.) I felt I would be valuable as a manager, but nobody else seemed to share my enthusiasm. As such I didn’t face the Devil’s Bargain so many others do: Take this promotion or risk less money “being happy”. “Take this promotion” was never on the table.
But upward in yearly earnings is only one direction you can go. I had started doing research on entrepreneurship, a logical second-step when you need more money, and some of the very thinkers teaching valuable lessons for first time entrepreneurs also hipped me to a fact I’d overlooked: my low pay could be a negotiating tool to get something even more valuable – time. (I’ll describe precisely how I came to this realization, and what I did, in a future article.) Here, as I see it, is the present menu-of-options:
- I have lots of time to experiment with business. I’m confident one will succeed at least enough to supplement my monthly expenses. Maybe something will succeed more than that. I’m not planning on it, but am doing everything I can to set the right conditions.
- It’s still possible that new opportunities might develop in my present company. Whether that happens, and whether I would jump directly at those opportunities or use them to negotiate for a third option, such as he ability to work from another location several months-a-year, is up-in-the-air. It’s important to note that in this case I’m partly in charge of my own destiny, because I maneuvered myself into a position where I’ll be judged rather directly for the results of my work. By being a “top performer”, I buy myself negotiating space, and am not waiting for circumstance to favor me. (If this whole article hasn’t made the point, I have a different conception of “top performer” than the usual one. I’m not talking about being the guy putting in 60 hours of “face time” “looking busy” every week. I’m talking about establishing metrics with your supervisor, then blowing them away. More on this in a future article.)
- Another thing is happening. I’m expanding my resume. It now includes marketing, SEO, um…starting a business from scratch with no investment and taking it to profitability, and other interesting stuff. I’ve seen a number of people get disheartened with the career rat-race in New York, and buying yourself time to build your resume – instead of falling for the “I need a job to get experience but I need experience to get the job” trap – is probably the single most important career hack out there.
Whew I’ve written for a long time!
But I’d like to speak about one more fundamental assumption underpinning this whole contraption – another reason this isn’t just Gen Y (is that a thing?) entitlement. The whole “put in an honest forty hours a week” ethos dates from the post Word War II boom.
Sorry – forgot to mention – history lesson.
Okay, so rampant GIs are returning from overseas, and for the first time since the ’20s, the economy needs workers manning the plants that will manufacture all the goods for the growing middle class and, like Don Draper and Roger Sterling, manning the agencies that will decide how to market them to us. Point being, the job market in the US, for most people, was a buyer’s market. Around this time a number of management theorists were incorporating behavioral psychology into running-a-workplace, and we began to see things like “advancement opportunity” and “benefits”, as employers rushed to attract and retain enough workers to make their quotas. (And as they clamored to avoid government healthcare and retirement funds, which they saw as a step toward communism. No biggie.)
In other words, a sort of “compact” was formed between employer and employee – put in an honest day’s work and you’ll always have a place at Ford, was something like it. (The compact, of course, was doomed almost before it began. Employers took on ludicrous and back-breaking retirement costs for an aging workforce at just the time overseas competition and more liberal attitudes toward “free trade” started to give them a run for their money.) What happened? Just what I said: Employers took on ludicrous and back-breaking retirement costs for an aging workforce at just the time overseas competition and more liberal attitudes toward “free trade” started to give them a run for their money. (Like a lot of what you’ll read on this blog, this crash-course in history sure ignores a lot and oversimplifies, but it hopefully captures the “spirit” of what happened, especially apropos of the actual thing we’re discussing, which we’ll now get back to.)
Okay, so employers start wantonly violating their end of the silly-to-begin-with “compact” with workers in the late ’70s, just as a series of court rulings, etc, decouples worker salaries from that of management. (Don’t know and don’t care about your politics – there’s a case to be made that those laws should never have existed.) The whole “you’ll always have a place to work” thing went by the wayside, then, but somehow the “put in an honest 40 hours” stuck around. Indeed, the hours Americans clocked in the office continued to climb to present-day, even as their real wages, relative-to-inflation, declined.
I marshal all this convoluted history simply to challenge the idea that blindly devoting 40, 50, 60 hours-per-week to an employer is either the most logical way to do business, or the only definition of “ambition” or “productivity”. Maybe, instead of viewing lifestyle hackers who decide up front how much money they need to finance their dreams, then plot a course to get there, making above-board agreements with employers as-necessary along the way, sometimes working as few as 16-18 hours/week for an employer, can be viewed as finally playing the real game – the game their employers have been playing for 40 years – instead of as unmotivated or entitled. (Yes, there are definitely unmotivated and entitled people out there. This blog is not for them. If you’re reading, you already know the difference.)
Soon, we’ll delve into how to negotiate raises/remote work, how to build a resume, and more specifics on careers in NYC. For now, I think 2170 words is enough for one post.
