The following article:
* Achieving Your Effective Hourly Rate *
– is based upon an article by David Risley that appeared in an edition of * The Daily *
– Because David Risley writes good stuff.
* The Daily * is like a daily blogging and online marketing blog – but via email. – It saves you having to remember to browse to whatever website on a daily basis; because it gets delivered to your inbox – daily.
In today’s economy it’s always good if you can do things economically and keep within a budgeted spending target for a particular period.
– But, having just said that, what extent would you go to in order to save a few bucks?
One thing that David Risley says that he’s doing in the immediate future, and that he uses as an example in his article, is to blow new insulation up into his attic. Doing so really increases the insulative efficiency of the house, and it also has a pretty high return on investment as far as the electricity bill is concerned.
( Summers in Florida, where David lives, can be extremely hot and humid. Air conditioning is a must, and, rather than insulation to keep the heat in – as we have here in the UK where I live – they have insulation to keep the heat out in Florida.
One exception to this has been the arctic plunge that even caused snow and near-freeing or freezing temperatures in Florida in January 2018 – And that’s a rare occasion when the insulation worked to keep the heat in.
David has choices: He can hire somebody to do it, or he and his wife, Malika, can do it themselves. His wife prefers that latter. Why would she want to do that? To save money, of course.
But the thing is that if they did do it themselves then they’d have to rent a machine, buy bags of insulation, load it up, lug it and the machine up into their attic, and then climb around in the attic like monkeys. It’ll probably be miserably hot up there, too. It would take quite a bit of their time and be quite frustrating at the end of the day.
Or David could pay somebody to expertly get it done for him – probably in a couple hours.
…And that’s exactly what he’s going to do. – Because here’s the thing…
His time has value. – Just like my time has value. – Just like everybody’s time has some kind of value attached to it.
Do you place value on your time?
You should. One of the biggest mindset shifts one can make in business and in life is to begin to value your own time.
Now this article is being written – or should that read ‘rewritten’ – by someone who spent a huge amount of time over a particular year, 2015, geeking out by hacking up a free theme, originally by The WordPress Team. – I then had to debug my work, and tweak everything that I’d debugged, and then tweak some of it again… In short I ended up spending many many hours in hand coding my own theme, derived from an original, and losing a lot of money in the form of missed time and opportunity.
Why did I do it? ‘Two reasons: I wanted to save money, and I wanted to prove to myself that I could craft a theme that was exactly as I wanted it to be in order to suit the purpose I intended it for perfectly.
Well I achieved the latter; but I didn’t save any money by doing so. – In fact quite the opposite. By following my pet project to completion I probably lost thousands.
In the book Work Less, Make More by James Schramko, one of the concepts James is big on is the effective hourly rate (EHR, for short).
Your EHR is calculated thus…
- Get how much money you make in a month.
- Subtract your expenses to get net profit.
- Get how many hours you worked that month.
- Divide profit by hours worked.
Mathematically that would be something like:
EHR= ($ per month – expenses) / hours worked per month
Does it make any sense for David to blow his own attic insulation?
Remember, that would include tracking down the machine, figuring out how to use it, loading it, making trips to get insulation, lugging all that crap around, then actually DOING it. – It wouldn’t be a quickie job for him – at all.
… And at this point we come back to me hacking my theme, and its subsequent effect on my Effective Hourly Rate: I’d hacked themes before, and was getting ever more proficient with PHP. – But what I was doing was several steps beyond anything that I’d done before.
I learned a lot from it too; I went further than I’d ever been before… This is starting to sound like an ephisode of Star Trek.
…But the question is: “At what price wisdom?”. – Is the high cost of my personal conquest of new frontiers worth the investment and the drain on resources? Would I rather be more wise with regard to coding and not do so well financially? – Or should I forsake the acquisition of knowledge and be better off financially? At the time I chose the former. Was I right to do so? From the point of view of the acquisition of wisdom and betterment of skills; yes. From a purely financial perspective it was nearly a bit of a disaster; but I muddled through.
As a part of my theme design I designed, coded, debugged, tweaked, and incorporated, among others, a landing page template.
Whilst doing this did help me to avoid buying a tool to do it much faster and possibly also better; it was, admittedly, a bit of a disaster as far as my EHR was concerned.
* If you desperately try to avoid spending money at all costs
– even if that means doing a lot of legwork on your own –
then you might be REALLY harming your EHR.
Time is the one asset that, once spent, you can’t get back.
Ensure that you treat your time with the value it deserves. – After all; there is a way of looking at it that values every microsecond, nanosecond, picosecond, of your life as priceless: That being that you are a unique entity, and you can never re-live any part of your life. – Therefore every grain of time that is personally experienced by you – no matter how you divide it – is beyond valuation.
(It is in the above reckoning that Effective Hourly Rate becomes a defunct category; as any quantity of time is counted as priceless.)
Your time does have value, no matter what.
Since it’s your time it’s up to you to say what you think it’s worth.
Thinking in terms of your Effective Hourly Rate will help you make better business decisions.
The question that you have to ask yourself- based on the above – is: –
What’s YOUR effective hourly rate (EHR) – and are you achieving that value when trading your time for whatever?
* The Daily *
The above was largely covered – from a different perspective – in
* The Daily *.
* The Daily * is a daily blogging and online marketing blog – via email to your inbox – available to email subscribers of
Blog Marketing Academy.
…Just a minute: I’m here to tell you – before you go – that I, also, have a free publication.
Mine has a twice-daily production-run –
But it’s rather news-centric and therefore doesn’t allow much leeway for more valuable information. – However it’s well worth a read – particularly by showbizzy-people: –