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Wanted! Equation on how should I value my time

My friend Jay and I had a brief twitter conversation about being guilty https://twitter.com/wjhuie/status/283748389278056448 of wasting time on little things.

I read this article awhile back (How should a startup founder value her time? | A Smart Bear) and have been meaning to come up with some sort of relevant equation that can apply to everyone.  Not just for “business/work” time, but also “free time”?

Prime example:  Most recently I found myself researching a SOHO NAS and becoming a victim of wasting too much time.  I was debating the small differences of model numbers, brands, processors, in the effort to find the best fit.  Of course as I read more… it just delayed my decision making by adding in more factors.  I wavered back and for starting at a price point of $300 and all the way up to $1000 trying to justify the features in my mind.  I won’t admit how much time I wasted just to end up where I started, but I’ll it was WAY TOO MUCH.

In the end, I would like to find a way to have a quick check to realize I’m wasting my time.  Here are some of the questions I would like to easily answer:

  1. When should I hire someone to do this instead?   (Maid, contractor,  consultant, personal assistant?)
  2. At what point, any time spent on this will have diminishing returns?

An easy way is trying to calculate “what is my time worth in $$?”  It’s easily quantifiable and easy to compare to the task at hand but I don’t feel like it’s always THAT easy.  Here are some other factors:

Factors:

  1. What is the total time loss/gained doing this activity? – Often there is more time vs. the activity itself.
  2. What is the opportunity cost of this activity? – What am I missing out by doing this?
  3. Are their longer term benefits that are worth more than the $$ amount or direct time spent today – Is this some sort of investment where it will take less time in the future?  Do you gain a skill or a networking contact?
  4. There is only so much space in your RAM / context to be concerned about is it worth that? – It’s not all about how much time things take, I’ve found it all takes space in your head… and you can only worry about so much at a given time.
  5. Can your time to $$ calculation work past a certain $$ or hour count? – At some point the “$$/hour” ratio of your time breaks down where you can work more hours to make up the $$.

What does everyone else to do to make these decisions quickly?  What factors have I not considered?  Does what I want exist, or is it all just part of refining the decision making process?

About Joshua Ho

1 comment for “Wanted! Equation on how should I value my time

  1. jay
    January 13, 2013 at 9:05 am

    it may be that when determining a monetary budget you also need to set a temporal one. I. agree that an hourly rate doesn’t always provide an empirical measure that matches the what seems emotionally rational; e.g. I don’t really make money every second of every day, so it doesn’t make sense to call and hire a maid just to clean up a spill.

    I think it’s the cognitive burdin that’s the hardest part to measure, I.e. if you’re spending so much time worrying about a NAS then what are you not thinking of…?

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