The Best Way to Value Your Time (+ Some Daily Motivation!)

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I hate the term YOLO…with a passion.

For those of you who are unfamiliar, this overused acronym stands for “You Only Live Once,” and has become the millennial version of “carpe diem” ever since a few rappers made it popular in 2011.

Why do I hate it, you ask?

Here’s why.

I hate the term YOLO because it diminishes the true meaning of the words that it is meant to represent.

YOLO is plastered on everything from T-Shirts to tattoos. However, the concept only seems to be summoned when a high school senior needs an excuse to skip class, or a strict paleo dieter wants a reason to order a Venti Mocha Frapp from Starbucks.

YOLO has become an excuse…a cop out.

However, acknowledging the idea that you only live once is much more than that…it is literally life changing (no pun intended). As a matter of fact, it is the sole reason that I took control of my personal finances a year and a half ago and found real estate.

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The Time You Have (in JellyBeans)

A lot of people ask me why I decided to start investing in real estate. Well, I can safely say that a large part of the reason was thanks to a YouTube video.

Yup. You heard me correctly.

I know what you are thinking. But Tyler, isn’t YouTube nothing but cat videos and terrible acoustic covers of pop songs? You’d be wrong.

Please watch this.

Do I have your attention yet?

I thought so.

You Only Live Once

Is your life tied to your W-2 income?

Are you trading your time for your money?

Are you putting cash away in your savings account hoping that your interest rate will beat out inflation?

Are you relying on a 401k or Social Security to save the day when you’re face to face with retirement?

Are you interested in traveling the world instead of just taking vacations?

Are you treating your home as your best investment? 

Do you think that life was meant to be lived in a cubicle?

If any of these apply to you, I urge you to use the video above as motivation. Get out there, start reading, and create some passive income through real estate for yourself and your family.

For those of you who have already seen the light when it comes to investing in real estate, let’s talk about the value of your time.

How Much is Your Time Worth?

It was back when I was a little kid that I realized I valued my time much more than my money. I still remember wondering why my folks always drove out of their way in order to go to the gas station that was a few cents cheaper per gallon.

It just didn’t make sense to me.

Now that I’m older, and maybe a tad bit wiser, it has all started to become a lot more clear.

Different people value their time and their money differently.

However, there are some ways to actually quantify the value of your time in order to make decisions a little bit easier.

If you haven’t done much thinking about this concept, check out the Time and Money Calculator from the good people over at ClearerThinking.org. Instead of merely dividing your salary by the number of hours you work in a week, this 10 minute long survey takes a systematic look at all of the variables involved in determining the value of your time.

The Way Forward

Most of us small time real estate investors don’t have salaried employees working under us. We don’t have a secretary, a marketing division, and full-time handyman. This means that we have to take special consideration into what jobs we outsource, and what jobs we take on ourselves.

Once you have completed the Time and Money Calculator, here are a few exercises to get you thinking about how you can use this time value in your everyday investing life.

Lets say that the value of your time = $45/hour

  1. The door knob at one of your rentals broke.
    • Option A – DIY
      • Cost: -$10 for parts
      • Time: -1.5 hours for travel & repair
      • Total Cost of Time/Money: -$77.50
    • Option B – Outsource
      • Cost: -$75 for a handyman
      • Time: 0 hours
      • Total Cost of Time/Money: -$75.00
  2. You’re considering buying Quickbooks, or continuing to use your system of bookkeeping
    • Option A – Buy Quickbooks
      • Cost: -$13/month
      • Time Saved: +3 hours/month
      • Total Cost of Time/Money Saved: +$122.00/month
    • Option B – Continue to use Excel
      • Cost: $0/month
      • Time Saved: 0 hours
      • Total Cost of Time/Money Saved: $0.00/month
  3. You’re in the market for cheap flooring
    • Option A – Drive across the city to a wholesale store in order to purchase 100sf of wood laminate @ $1.79/sq ft. Round trip takes 1.5 hours.
      • Cost: -$179 for flooring
      • Time:-$67.50 for travel
      • Total Cost of Time/Money: -$246.50
    • Option B – Drive just down the street in order to purchase 100sf of wood laminate @ $2.50/sq ft. Round trip takes 30.
      • Cost: -$250 for flooring
      • Time: -$22.50 for travel
      • Total Cost of Time/Money: -$272.50

Final Thoughts

There are no right or wrong answers to these scenarios…they are merely a tool to start thinking about the types of time/value decisions that we unknowingly make every day.

For example, in scenario #1, it is cheaper to hire out the labor than to do it yourself. But what if you really enjoy fixing door knobs? Well, then by all means do it. This is a guide, not a rule of law.

However, I urge all of us to reach for consistency whenever we can. If we are willing to drive all the way across town to save $26 on flooring, why would we NOT be willing to purchase a software for $13/month that could potentially save us $122 every month?

By setting a dollar value for each hour of our time, it helps us to make quantifiable decisions about how to spend our time instead of abdicating that responsibility to our own biases. 

About Author

Tyler Flagg

Tyler is a pilot by day and aspiring entrepreneur by night. He started investing in April of 2014 and acquired three properties in the first 8 months. His goal is to become financially independent through real estate in order to free up time for travel and starting businesses.

11 Comments

  1. Mario Mormile

    Thanks for the post Tyler- I know in my own life, I do this ( as far as not taking the time to see if the numbers make sense). I’m going to incorporate this into my weekly goal setting. I value my time with my daughter too much not to.

  2. Kyle Hipp

    My issue is that I intend to “retire early”. By that I mean going full time into real estate. I enjoy the majority of the activities involved in my rental real estate business so I have no problem putting in my 52 hours a week in on my day job, then the extra waking hours on the business. The more I do the more efficient I become. Every dollar, I save or extra Dollar I bring in, the closer I am to retirement.

    • Tyler Flagg

      I definitely agree with you Kyle. It’s important to be thrifty and save money where you can. However, I feel like there is a fine line between being frugal and spending your precious time on stuff that could be outsourced for cheaper. Thanks for the comment and best of luck!

  3. Re: Kyle Hipp – I would like to propose a paradigm shift to you. Previously to creating my own profitable organization, I had an extremely similar viewpoint re: when getting started doing things I enjoyed myself, and then spending all of my remaining attention on my growing business. I quickly found that my life became out of balance, and that I began underperforming in the roles of my life that were extremely important to me, such as a husband, father, etc.

    As Mr. Flagg suggests, outsourcing the items that are a negative opportunity cost for your time + money relative to the cost of outsourcing allows you to free up some of your valuable attention and for you to focus on generating the highest net positive return on attention (ROA) in the areas/roles that are most important to you in your life.

    For example, when starting out, I accomplished every single task that was required to make my organization succeed. As we became more successful, I did not have time to decide which computers to purchase, or which coffee machines to buy for the office. This further compounds itself when you grow to a point where your task is to develop the leaders in your organization. This is absolutely required if you wish to achieve the leadership multiple as discussed in John Maxwell’s 21 irrefutable laws of leadership… Leadership multiplies the effectiveness of an organization, and we simply cannot ignore the opportunity cost of our time + money, and Mr. Flagg is extremely on point in his discussion of this posting.

    Tim

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