How Much is Your Time Worth? Here’s How to Calculate it (& Up Your Value!)


Recognizing that your time is valuable is the first step toward building a highly successful and efficient business or real estate portfolio. The second step is to figure out how you can build systems that remove you from low value tasks and allow you to focus solely on the high value tasks. Investors who focus on the tasks that bring in the most value will build the greatest empires.

Everyone’s time is valuable, but to varying degrees. Today’s article will show you why knowing the value of your time is important, how to measure it, and how time savings can come into play. We’ll also touch on non-monetary value.

Discussing these topics will allow you to gain great insight into your own perception of the value of your time. You will be empowered to say “no” when low value opportunities come up. You will look at cost versus value-add completely differently, and you will begin to focus on automating the lowest value functions of your business.

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Why You Should Care How Much Your Time is Worth

Understanding how much your time is worth is crucial for any sort of decision making, whether business or personal in nature. If you know that the value of your time is $50 per hour, you will say “no” to opportunities that offer $40 per hour. Similarly, if the non-monetary value (discussed later) of an activity or product is less than the value of your time, you can easily say “no.”

Knowing the value of your time aids your decision-making process and allows you to focus on activities that bring in higher value than you’ve determined your time is worth. Knowing the value of your time also allows you to effectively price your services, negotiate salary, and engage in high value activities, even if we can’t assign a monetary value.

Great examples of people who may not understand the value of their time are those that stand in line for free stuff. For instance, I once saw a very well-known chicken sandwich chain giving away free sandwiches. All you had to do was show up. People came in droves, lined up, and stood there for an hour waiting to be served their free sandwich. These people inherently valued their time at $3.99 an hour.

People who understand the value of their time will not be caught in that free sandwich line unless there is some non-monetary value to be gained, such as socializing with friends. If they are craving a sandwich, they’ll just pay the $3.99 rather than wait in the long line to get it for free.

Another example is one that I’ve used personally in my business. I know what my time is worth today, but I also have goals on what I want my time to be worth in the future. This not only allows me to price my services more effectively, but it also allows me to be more selective with the clients I choose to take on.

Related: Financial Freedom: 14 Steps to Stop Relying on Your 9-5 Job’s Income

I’ve moved away from “taking on anyone and everyone” to defining a target client and only taking on that type of client. This is because the type of client I’m targeting will place a higher value on my time.


How the Value of Time Applies to Real Estate Investing

Knowing the value of your time can help you in your real estate investing as well. For instance, if your time is worth $50 per hour and it’s going to take you four hours to fix broken pipes at your rental property, you may be inclined to pay a plumber $150 to fix the problem. Or you pay a plumber $45 per hour. Both outcomes result in you monetarily gaining from your decision to outsource the work.

But if you don’t know the value of your time, you’ll become the classic do-it-yourself landlord and business owner. You won’t focus your time on the highest valued activities. You’ll focus squarely on your savings in lump-sum dollar terms. This is a bad way to run a business.

Recently, Mindy (whom I greatly respect) wrote about reasons you will likely always be poor. One of those reasons was that you hire out all your work. Conversely, I think that if you are doing it all yourself, you will always be poor. There are many real-life examples of my theory as well.

How many wealthy individuals do you see doing all the work themselves? How many poor people do you see doing all the work themselves? My point exactly.

Her reasoning doesn’t really address the root issue, though, which is how you value your time. If you are able to hire out your work at less than the hourly rate of which your time is worth, then you hire it out. It’s a simple concept, but tough in practice. As encouragement, Richard Branson doesn’t even do his own laundry!

How to Determine and Measure Value

Everyone should know, at least on a basic level, what the value of an hour is to them. A relatively easy way to calculate the value of a work hour is to simply take your gross income and divide it by 2,080 hours. This will tell you the gross value of each of your working hours assuming a 40 hour work week.

I use gross income and 40 hours per week because it’s a very easy and quick calculation that can be applied universally. It’s comparable because virtually everyone works, in some capacity, at least 40 hours a week.

If you want to take it a step further, you can divide your gross income by your average daily “awake” hours. I recommend you run this calculation as well, but keep in mind that non-monetary value (which we will discuss shortly) comes into play, which makes this calculation convoluted. At the very least, it will provide you with a quantitative value that you can always keep in your mind for future reference.

Taking it further still, obviously everyone has a different tax position, and your unique tax position should be taken into consideration. An employee who generates $100,000 will theoretically pay less in taxes than a business owner who generates the same amount. So the post-tax value per hour is an important consideration.


An Example

As an example, a business owner filing single who grosses $150,000 per year, nets $100,000 per year, and sleeps seven hours a day on average will result in the following:

Gross value per working hour: $72.11 ($150,000/2,080 hours)

Net value per working hour: $48.08 ($100,000/2,080 hours)

Gross value per awake hour: $24.17 ($150,000/6,205 hours)

Net value per awake hour: $16.12 ($100,000/6,205 hours)

Post-tax value per working hour: $32.68 (($100,000 – [Federal Tax: $17,888] – [Self-Employment Tax: $14,130]/2,080)

Post-tax value per awake hour: $10.96 (($100,000 – [Federal Tax: $17,888] – [Self-Employment Tax: $14,130]/6,205)

As you can see, the results vary drastically depending on the variables. They can all be used separately in different ways. For instance, if you are a growing business, you may be focused on the “top line,” which means you should emphasize growing your gross values through increased sales. If you are leveling off and focused on building a sustainable business, you should be focused on saving time or money, your “bottom line” or net values.

In business, I use the gross value per working hour to make decisions. This is because most opportunities are presented on gross value terms, making it quite easy to compare the value of my time per opportunity.

On a personal level, I know exactly what my post-tax value per awake hour is purely for motivational purposes. If I know I’m burning a potential $xx per hour, I’m going to be motivated to make something of that hour, even if it’s 10:00 a.m. on Sunday.

I recently read an article that advised readers to remind themselves constantly that they could die within the next few moments, days, weeks, months, etc. The purpose of this practice is to inspire action. If you know a deadline is coming up, you’ll be motivated to crush it.

Related: How to Earn More Money at Your 9 to 5 (So You Can Invest It in Real Estate!)

I take a less morbid view that works better for my financial mind. Since you are a real estate investor or a business owner, my method will likely work for you, too. And that’s to simply understand your post-tax value per awake hour and always focus on gaining more value than your post-tax value per awake hour is worth.

A hundred thousand dollars seems like a lot of money, and it is indeed a solid chunk of change. But when you put it on a post-tax per awake hour perspective, $10.96 really isn’t a whole lot. What would happen if you can increase it by 50%? Double it? Surely it can’t be that hard.

That’s the mindset I use this for. Instead of saying, “I need to make more sales to hit $100k,” I say “I need the value of my hour to increase by 200%.” This allows me to focus on a smaller, seemingly easier number to manage. It pushes me to work as efficiently as possible to boost that number and only engage in value-add opportunities or activities. Time is money.


Saving Time Adds Value

We can talk in terms of dollars all day long, but the value of your time is also affected by how much time you spend working in any given area. So while I push people to focus on expanding incomes, there comes a point where we should switch gears and focus on efficiency instead.

Remember, in our value per hour equation, the numerator is expressed in dollars, and the denominator is expressed in hours. If we decrease the denominator, we increase the value of our hour.

For instance, a person making $100,000 per year in net income and working 2,080 hours has a value per hour of $48.08. But if that person can implement systems that make the working hour more efficient and save 100 hours per year, their value per hour increases to $50.51.

When should you start focusing on efficiencies? I’m honestly not sure. There is an economic concept called the “diminishing marginal returns,” which essentially means each additional dollar you earn decreases in value to the earner.

This can be best illustrated by the fact that when you eat one cheeseburger, it’s delicious. But when you eat several in a row, the next one you eat is less delicious as your body begins to send signals to your brain that you are getting full.

At some point, earning another dollar will not bring you as much value as figuring out how to save time. At that point, you will want to focus on becoming the most efficient business around. Adhere to the 4-Hour Workweek mindset and figure out how you can outsource as much as possible.

Not only will you decrease the denominator (time), thereby increasing your value on an hourly basis, but you’ll also get to focus on ever-increasing valuable tasks. And one day soon, you’ll be focused solely on the highest value tasks, which will maximize your value per hour.

Understanding Non-Monetary Value

The majority of “things” in this world bring value to someone, somewhere. In your life, even if you can’t quantify the value, it doesn’t mean that such value does not exist.

As you may or may not know, I’m a big proponent for expanding one’s income rather than spending time and energy focusing on living an extremely frugal life. The practice of saving money is great, but people who blindly follow frugality are not only missing out on life, but also missing out on intangible value.

For instance, I frequently visit my local coffee shop and purchase a $5 latte. The latte provides value, such as energy and uplift in mood. It provides convenience. It provides sociability, interaction, and networking opportunities. It provides a change from the daily routine.

Related: 7 Sharing Economy Side Hustles Real Estate Investors Can Use to Earn Extra Cash

If I cut the latte out of my routine, I’d save $5 per trip, but I also wouldn’t benefit from the non-monetary value the latte trip provides. For me, that value is worth more than the $5 in my pocket.

The point is that non-monetary value is tied to virtually every product or service we buy. Common measures can be your change in mood or ability to build new relationships. But quantifying that value is extremely difficult, if not impossible. I haven’t figured out how to quantify non-monetary value, but maybe that’s not such a bad thing.

Which leads me back to the values we were calculating earlier. While it’s great to know what your post-tax value per awake hour is, it may not be that helpful in the grand scheme of things. This is because our non-working hours are chock full of non-monetary value-added experiences.

Hiking, running, swimming, and cycling will all add value to your life. But you’d have a tough time calculating how much value has been added.

So how can you use this in tandem with calculating your value per hour? By shifting your mindset.

If you are clearly participating in a non-value add activity, then not only are you losing the potential to gain non-monetary value, but you are also losing the opportunity to earn the hourly value that you’ve calculated you’re worth. It’s like a negative double whammy.

Success-oriented people think about their lives in this manner. They don’t waste time on non-value add activities, but they know non-monetary value exists and that constantly pounding the pavement looking for deals isn’t necessarily the best way to live.



So now you know why it’s important to understand your value, how to calculate it, and that non-monetary value exists in virtually everything we do.

My hope is that you will use this information to become more productive. I use it to maintain laser focus in achieving my goals. When I start wasting time with a non-value add activity, I remind myself that my time is worth much more than what I’m currently valuing it at.

That mindset has helped me grow a rental portfolio and a business that far exceeds the income I ever expected to earn.

Have you ever calculated how much your time is worth? What are you doing to up your time value?

Leave your comments below!

About Author

Brandon Hall

Brandon Hall, owner of The Real Estate CPA, is an entrepreneur at heart who happens to be good at taxes. Brandon is a real estate investor and CPA specializing in providing business advice and creative tax strategies for real estate investors. Brandon's Big 4 and personal investing experiences allow him to provide unique advice to each of his clients. Sign up for my FREE NEWSLETTER to receive tips and updates related to business and taxes.


  1. William Morrison

    Nice read Brandon.

    My dad laid about the same picture for me when I was young. I had asked him why he wasn’t doing a particular thing (maintenance) himself when I knew it was easy and he could obliviously do it. He used the opportunity have the basic conversation you’ve laid out above with me. He was lucky enough to be making about 3x or more per hours than the cost of the repair, made a great life example for me.
    So I’ve had the same goal with my kids. One with their first rental just this week again as we discussed what to hire out for and what to do themselves.

    Again, great read.

    • Brandon Hall

      I’m in the camp that you do the work yourself to learn it, but then hire it out. When you hire it out to professionals, you gain efficiency and quality over doing it yourself. There’s tons of value to be added there.

      • Deanna Opgenort

        Knowing the pieces & parts for house repair helps a lot when dealing with repairs (And opportunism –$2k-3k to dig & replace 30′ of 5-year old ABS sewer pipe because there was a clog when my tenant flushed tampons? Um no, but thanks for the offer.)

  2. Great article and a very necessary one as well. Just yesterday I had a delivery of a fridge between 3:30- 5:30 and I knew it wasn’t worth my time to waste 2 potential hour waiting around for a delivery. I farmed the job out to my nephew who was more than happy to make some extra cash. However I did get caught later in the day having to go to a property I have up for sale to water the plants….. I think about a lot of the tasks I do on a daily basis and many of them can be done by someone else at a much lower price than me doing them. I’m conscious of my actions and I’m working on putting the right people and systems in place. Thanks for your article it’s positive reinforcement and puts things in prospective.

  3. Bill Gulley

    Good job applying micro economics Brandon, well done! The opportunity cost of choosing the wrong activity. Often people limit their opportunities as you pointed out, they may not have an opportunity for a higher valued activity and fixing the leaky faucet saving the plumber’s bill is their best opportunity.

    Your cheeseburger is the marginal propensity of consumption, a man walking through the desert has a very high value on a bottle of water, but after ten bottles of water the eleventh bottle has very little value to him. As consumption increases value can be lost.

    Great blog! Take care 🙂

  4. Mary B.

    Excellent blog all around. Definitely one of the most useful business articles that I’ve read in a while and I read tons. I want to share this, yet there are so many key statements that I’d like to highlight… Thanks a million, Brandon.


  5. Stacy E.

    This is a really great post! I used to not value my time at all. I would stand in those “free” lines or go visit 4 stores to get the best deal. (When you are in college and have the time but lack money one could argue it was even worth it…) Luckily, I’ve moved on from that but I never plugged in my hard numbers before. Your description and post makes it easy. It’s certainly something I will be looking at more closely in the future.
    Thanks Again,

  6. While your article is a good reminder of the value of one’s time I don’t particularly agree with your conclusions. You touch on non-monetary value which I believe has more value than you ascribe to it. For instance, knowing how to do trade work not only allows one to improve ones negotiating skills with plumbers and electricians et al and the satisfaction gained by doing some of these jobs oneself also has value. Further, your premise assumes that if one hires out this or that the exchange includes additional billable hours at your higher rate for whatever profession you are in (or in building your empire). That certainly isn’t necessarily true. I have done most of my own maintenance over the years, gained a great deal of satisfaction as a result, also maintained a profession, and built a nice portfolio and balance sheet. Regardless, I appreciate your article.

    • Brandon Hall

      Ryan – though you disagree, I’d say you secretly agree with the premise behind the article which is to simply be thinking about the value of your time. If you have a lot to be gained (either in knowledge or satisfaction) by doing the work yourself, then do the work yourself! But at some point, there will be a tipping point where your time is better spent on higher value tasks. That’s the point I was trying to make.

  7. Shawn Corcoran

    Very well written and laid out article. I have always heard about this but I have never seen a formula to provide your hourly worth. Thank you so much for this. It was very informative and I will be sure to print this out for future reference.

  8. Valuable insight but with some flaws. If you take the plumber example and decide to pay them $135 to complete the repair (which is more accurately prices at $80 to $100 per hour or $270 to $300) your arguing that because you value your time at $50 per hour you are somehow making $15. This isn’t possible because unlike the plumber, who gets an actual payment, you don’t get a $150 payment. So the better way to analyze this situation is to say “do I have a way if actually making that $150 in real money at this moment in lieu of doing the work myself?”

    • Brandon Hall

      You raise a good point in that if you don’t have anything else to do, then doing it yourself may be the best route to take.

      However I disagree in regards to the plumbing example. The plumber will come during the day, while you’re at work, which means while he’s working on the house, you are literally earning money and profiting from the exchange. The alternative is for you to give up your personal time to work on the house. Your personal time may be spent with friends and family. It may be spent blogging, researching, reading, or even growing a side business. So the question is: is losing your personal time worth $150?

  9. Astrid van Boom

    Awesome article. Meant for me, as I am struggling to use my time more effectively in starting my business. Jumping from the one task to the other, and not setting clear time frame on tasks to be done and completed or prioritizing. Thanks again for a great article.

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