Time is Precious — What’s your hourly rate?

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Recently I was talking to a successful entrepreneur and we got to discussing the precious nature of time. Once the business or entrepreneur has all the financial resources needed, time becomes even more valuable. On the individual front, there are always requests for time-related things: coffees, lunches, panels, events, conferences, etc. It’s easy to set up a personal schedule with tons of meetings and not accomplish anything.

Now, when thinking about time as a precious resource, the logical way to quantify it is to determine your hourly rate. A great hourly rate estimate for time is as follows:

Take your annual compensation for last year (e.g. $100k), divide it by two and drop the thousands, and the result is your hourly rate (e.g. a $100,000/year would be $50 per hour).

So, the next time someone asks for an hour of time and you’re unsure about the value, think about the hourly rate and where best that time is spent.

What else? What are your thoughts on time being precious and the hourly rate as part of the opportunity cost?

Comments

7 responses to “Time is Precious — What’s your hourly rate?”

October 11, 2013

Ian

Simple and Useful! Keeping this in mind.

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October 12, 2013

Ray Carroll (@raycarroll55)

Nice soundbite here on the value of time. Easy to calculate and thanks for sharing.

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October 12, 2013

Eric Santos

David,
Jason Cohen (@asmartbeat) wrote about this topic a while ago. I agree with him that we, as founders, should value our time a lot more than what we get paid for.
I think it’s worth reading:
http://blog.asmartbear.com/value-time.html

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October 12, 2013

neal302

I tkink that a hourly wage just limits what you can earn in a day. I know meeting with clients, employees and other business related activities can not always and probably should not be charged services. good customer service always pays , and quality time spent helping others and making their project the best it can be, will always result in more quality sales and happy customers.making more profit from more clients and customers rather than more hours.
There are 24 hours in a day . And an endless amount of potential cliants. Give me more opportunities anyday.

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October 12, 2013

Gano Healthy

Time when we’ll thought out and executed can be the best measure of one’s success.

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October 12, 2013

Jason Swenk

Great post. One of the things I also think about is not just my hourly rate for that meeting but the opportunity cost of spending my time doing something that could yield a multiple.

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October 22, 2013

betherenaissance

I like this for estimating a cost value for earning potential. I have a different perspective for value of time. My value is not what is my time worth but how I’m spending. Most of my time is more precious to me than money and each day is a gift of 24 hours. If you knew that you had only 1 day to live, would you “spend” it earning money? I didn’t think so, so be sure to include what you value most doing, too, so you “save” time for “spending” time, but more importantly to make the most of your gift of time of being.

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