the no fail way to calculate what your time is worth

Summary

what’s your time worth. think about it for a minute. now I’m going to tell you it’s worth nothing. and once you actually understand that, you’ve become an entrepreneur and can start making serious money.

1. if you grew up in hourly mode you walked around assigning a dollar amount to your minutes. eight hours of sleep equals X dollars of lost work. that’s a sad way to live and it’s also bad math. you can’t scale time. only value scales.

2. the rule. you solve a problem that is worth a rate of $200 an hour. you don’t have time worth $200. the problem is worth that to the person paying. it has nothing to do with you, your certifications, where you went to school. they don’t care.

3. neurosurgeon lawn care. imagine a neurosurgeon knocks on your door and offers to cut your grass for $500 because his time is worth $500. you’d say no and tell him the kid down the street will do it for $20. his medical training has zero weight in the value equation for grass. same logic everywhere.

4. the value equation, from Alex Hormozi’s 100M Offers. value equals desired outcome times perceived likelihood of achievement, divided by time delay times effort and sacrifice. so the levers are increase the outcome, increase the likelihood, decrease the time, decrease the effort. four ways to make the same offer worth more.

5. Jim Rohn said it cleanest decades ago. we get paid for bringing value to the marketplace. it takes time, but we get paid for the value, not the time. employee or entrepreneur, same rule.

6. employee example. you write two articles a week, that’s the KPI from your boss. the hourly mind says write four articles for more pay. the value mind says find what your boss actually wants behind that KPI, which is reach. then go back with an offer. I’ll keep the two articles, I’ve hired a consultant on my own dime to help us double reach in 30 days, I’ll do it after hours, you don’t lift a finger, can we revisit pay in 30 days. jaw on the floor.

7. entrepreneur example. weak offer, I’ll help you build your dream business and a thousand testimonials prove it. that’s a $2,000 offer. strong offer, I’ll do it all, money back guarantee in 90 days, my team builds the marketing, brings the customers, trains your replacements. now you’ve increased the outcome, increased the likelihood, cut the time, eliminated the effort. that’s a $30K to $50K offer.

8. ask yourself constantly how to move each lever in your offer. your time is worth nothing. the problem you solve and the way you frame the solution determines everything. try harder.

Transcript

what is your time worth

The most impactful business is the business that genuinely improves another human, a better human business. And to grow a business like this, you have to continually improve yourself. This podcast is a documentation of that thesis, scaling businesses and also personal growth. My goal is for you to shortcut this journey.

So if you’re ready to try hard, subscribe. If you like what you’re hearing, please share and enjoy. What is your time worth? I want you to think about that for a minute because this is something I love to talk about and challenge entrepreneurs on because the worst thing that you can do, the worst mindset you can have is to actually think your time is worth something.

And I’m going to talk about this more, but the second you start putting some sort of dollar amount to your minutes, you are losing the entrepreneurial game. You will never learn how to scale because time does not scale. We only have so much of it. So I don’t care if you’re in a profession where you charge so much per hour.

Does not matter. Does not matter. You cannot scale with that mindset. So what is your time worth right now? If you had to, if you had to ballpark it, just taking either what your actual hourly rate is, if you are in a profession where you can charge by the hour or if you have a salary and you put in X amount of hours, what’s it worth?

Is it $100 an hour, $1,000 an hour, $10,000 an hour? But it doesn’t really matter at the end of the day because I will tell you a thousand times over, your time is worth nothing. And the example I like to give is what I call neurosurgeon lawn care. And neurosurgeon lawn care, this company, their motto, their slogan is we do the same job almost anyone can do, but we charge more money.

So I have not been paid for an hour of my time since I was 18 years old. I went from high school to college to active duty military, which was a salary, and then to entrepreneur. So the only jobs I legitimately got paid for 60 minutes of my time were in high school and college working in the service industries and really gyms, things like that.

After that, no such thing. And I’m so thankful for that because I never got into this mindset of hourly based wages, you know, putting a value to the minutes of my life. And so if I had that mindset, I’d walk around thinking an hour of my time is worth a certain amount. I could equate eight hours of sleep to a dollar value.

And that’s just like a sad thing to do. So I’ll let you in on a little secret. Your time is worth nothing. My time is worth nothing. I mean, you could be a plumber that charges $200 an hour, but your time is not worth $200 an hour. You solve a problem that is worth a rate of $200 an hour. I could end the podcast right there.

neurosurgeon lawn care

If you truly understand what that means and how that applies to entrepreneurship, you’re going to be much further along. You solve a problem that is worth a rate of $200 per hour. That means someone is willing to have you do it for $200 because it’s a problem they don’t want to solve. It has nothing to do with who you are, what certifications you got, where you went to school.

None of that matters. People don’t care about that. People care about their problem being solved. So it has everything to do with the issue you’re solving and not the time you put in. If you had some dude knock on your door and offer to cut your grass, you’d probably ask, how much is this going to cost me?

What if he then explained, well, I’m a neurosurgeon who loves cutting grass, but I have to value my time. You hear that, like, I have to value my time, I got to value my time, it’s so important. So my going rate for an hour of my time is around $500 an hour. This is a neurosurgeon. So he says, so since my time is worth $500 an hour, it will cost you about $500 for me to cut your grass today because it’s going to take me about an hour to cut it.

You’d say no. Right? Then he explains all the schools he went to, all the lives that he saved, and how no one can get better patient outcomes than him. There’s just one problem. His training as a surgeon holds no weight in the cutting of grass. So you let him know the kid down the street will do it for $20 and that he can see his way off your property.

You never actually get paid for the value of your time because time has no value. You get paid for the value of the problem you solve. Once you understand that, you have become an entrepreneur and you can start making serious money. So a book from 100 Million Dollar Offers has what’s called the value equation in it where basically talks about value being finding the desired outcome for somebody in the perceived likelihood of achievement that they will achieve it with decreasing the time.

So how long is it going to take them to get the outcome, desired outcome, and what their effort and sacrifice is going to be. So you’re trying to increase the desired outcome, increase the perceived likelihood of achievement, decrease the time delay as much as possible. So from I have a problem to my problem is solved, how quickly can you do it, and then how much effort and sacrifice is on the part of the person who is purchasing the service.

That’s the basics of the value equation. Jim Rohn put it this way. He said, we get paid for bringing value to the marketplace. It takes time, but we get paid for the value, not the time. And that was, you know, it’s just perfect. From so many decades ago, Jim Rohn puts it perfectly. So it doesn’t matter if you’re an employee or an entrepreneur here, if you’re listening to this.

The more value you bring to another business or the more value you bring to your own business, the more value you will get paid. This is true. Like I said, if you’re an employee, and I’m going to give you an example of that. Because let’s take Warren Buffett as an example. I don’t know if he’s the world’s richest man right now, but he’s got to be like top ten or something like that.

the value equation

So he’s worth billions. And if you’re like, hey, Warren, I want an hour of your time. How much is it going to cost? And it would be, he couldn’t even do it, but what if he was like, okay, it’ll be a billion dollars. Let’s just say you had a billion dollars sitting around and you really want to talk to Warren Buffett.

Say you had $50 billion sitting around and you’re like, whatever, I’ll pay him. But is there enough value in a one hour conversation with Warren Buffett to actually pay a billion dollars? Do you think talking to him for 60 straight minutes will make you more than $1 billion? Some people would say yes.

Some people would say no. I think it would be no. I don’t think you could pay someone a billion dollars and they give you more than a billion dollars worth of value in 60 minutes. I don’t care who you are. I just don’t think that it could be done. That’s my take. But if he had some insider information that was going to be worth a lot, several billion dollars, sure, pay him a billion.

It’s definitely worth it. So the ultimate takeaway is there is no limit to what people will pay to have problems solved and value brought to the marketplace, so long as there’s always ROI. So again, walking through that equation, what we’re looking to do is how do I increase the desired outcome? How do I increase the likelihood of achieving the desired outcome?

How do I get the desired outcome in the shortest amount of time? And how do I reduce the effort and sacrifice for the person I’m offering this to? That’s what we’re looking to do. So I will give you an employee example just in case you are an employee or maybe you want employees like this. If I had an employee come to me and say something like this, one, they have to put a lot on the line to be able to do it, but ultimately if they could deliver, I would definitely renegotiate their pay.

So here’s an example, an employee. So let’s say I was a writer and my main KPI was given to me by my boss was to publish two articles per week. And so I ask myself as an employee, I say, hey, how can I increase my value to the company? Can I double my output to four articles per week and get paid more?

I absolutely could, but that’s back to an hourly mindset. That’s just trying to put more cogs in the wheel and like double, like how many times can you do that? Again, it’s not a scale mentality, that’s a time mentality. So first I have to ask myself, what does my boss really want? He wants two articles per week to keep the content engine going to maintain readership, but the true desired outcome is for my pieces to get as much reach as humanly possible and even more readers.

So what if I went to my boss and I said this, hey boss, I will keep writing those two high quality weekly articles you want, but I want to get more eyes on my articles. So I’m increasing the desired outcome that he wants. I say, so I’ve hired a consultant, which it increases the likelihood of achievement and my boss’s mind.

jim rohn on value vs time

So I’ve hired a consultant that helps writers like me grow organic social followings that can make content go viral. I’m confident that I can double the number of readers, again, increasing the desired outcome for my boss. I can double the number of readers to my articles in the next 30 days, so now I’m decreasing the time delay.

I’m doubling the readership in a month. I’ll do most of this in my free time after work, so working with a consultant. I’m going to work with this consultant in my free time after work, and I’m also paying for this consultant out of pocket, so I don’t need anything from you. So I just decreased the effort and sacrifice from my boss.

I’m saying, look, I’m paying for this consultant. I’m going to get you what you want. I’m doing it on my time. Everything my boss wants, there’s nothing he could really come back at. There’s not even a negotiation here. I’m just saying, hey, I’m going to frickin’ knock it out of the park for you. What do you think?

And then the kicker at the end, I say, so we don’t need to discuss it now, but if I knock it out of the park with my plan, would you be open to a conversation about renegotiating my pay one month from now? What do you think your boss is going to say you come at him like that? Your boss’s jaw is going to hit the floor, and if you succeed, you’re going to get a raise that next month.

There’s no way you wouldn’t. So now let’s give an entrepreneur example. So how can we increase value as entrepreneurs? Well, you have to ask yourself first, who is your boss? Our boss as entrepreneurs are our customers. So let’s break it down. So the desired outcome, let’s say my customers are someone who wants to start an online business.

So they want to make good money, spend more time with family, and work from home. Here’s offer number one, and here’s what a crappy offer looks like, and it might not sound crappy to you, but this is crappy. I will help you get to your dream business, which is the, I’m increasing the desired outcome, and I know I can because I’ve helped a thousand people just like you do the same.

So I have this testimonial backing, right, increases the likelihood of achievement. And then I stop. I will get you what you want, and I know I can because I’ve helped a thousand people do it. A lot of businesses think this is good. This is what most businesses do, and they stop. This is not a good offer.

This is not a good offer. Saying you can get them where they want to be and using testimonials to prove it is what every business does, and it’s only half the equation. So let’s add to it. Here’s a better offer. I will help you get to your dream business, increase the desired outcome, and I know I can because I’ve helped a thousand people like you do the same.

employee and entrepreneur examples

Okay, I’ve increased the likelihood of achievement. Now I’m taking the next step. I can guarantee, so I’m increasing the likelihood of achievement more. I can guarantee you will be making enough money to go full time in your business in the next 90 days, 90 days, I’m decreasing the time delay, or I’ll give you all your money back, and it’s a ton of work to do in 90 days, and you need more time than you have.

So my team is going to do everything. All we need you to do is create the content. We will build the marketing, bring in the customers, and set up a process for fulfillment, which decreases effort and sacrifice. After we are done, we will hire and train replacements that work for you instead of always needing us.

So I just went from a $2,000 offer, which is, hey, I’ll help you build a business, and I’ve done it before, so it’s going to work for you, that’s a $2,000 offer, maybe. If you’ve actually helped a thousand people do it, it’s a $2,000 offer. If I say, I’m going to do it all, I’ve helped a thousand people do it, I’m going to guarantee it, it’s going to happen in 90 days, you get your money back, and I don’t need you to do anything.

If I’m going to do everything and then hand you a business at the end of this 90-day sprint that we do, that is a $20,000, $30,000, $40,000, $50,000 offer, that is a massive offer. That’s absolutely guaranteeing someone has a business where they get their money back in 90 days. That’s an offer that you can’t even compete with.

You have to be so good at what you do to be able to make that kind of offer, but that is the kind of offer that gets you scale, that brings value to the marketplace. You don’t have to go to that extreme, obviously, but you need to start thinking of it this way. How much value can you bring? How can you do all of these things?

How can you increase the desired outcome? How can I increase the likelihood of achieving the desired outcome? How can I get the desired outcome in the shortest amount of time? How do I reduce the effort and sacrifice? What’s my time worth? My time is worth absolutely nothing, but the bigger the problem I solve and the more value I can bring, the more money I can make.

It doesn’t matter if you’re an employee or an entrepreneur. Play around with the value equation, increase the value you bring to the marketplace, communicate that value properly, and earn more money. Try harder.