The No-Fail Way to Calculate What Your Time is Worth
What would you say an hour of your time is worth?
What is your time worth?
Think about it.
What would you say an hour of your time is worth?
$100…?
$1,000…?
$10,000..?
I hate to be the first to break it to you, but your time is worth nothing.
A Neurosurgeon That Cuts Your Grass
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/Salary, to Entrepreneur.
The only jobs I legitimately got paid for 60 minutes of my time were in high school and college, working in the services industry, gyms, etc.
After that, no such thing.
And I am SO THANKFUL for that!
Why am I thankful for having only a few hourly jobs?
Hourly-based wages put a value on minutes of life.
I would walk around thinking an hour of my time is worth a certain amount. I could equate 8 hours of sleep to a dollar value.
So I’ll let you in on a little secret…
YOUR TIME IS WORTH NOTHING.
You could be a plumber that charges $200/hr. But your time is not worth $200/hr.
You solve a problem that is worth a rate of $200/hr. It has everything to do with the issue you are 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?”
What if he then explained…
“Well, I am a neurosurgeon who loves cutting grass. So I have to value my time. My going rate for an hour of my time is around $500/hr. So, since that’s what my time is worth, it will cost you about $500 for me to cut your grass today.”
You say, “No.”
Then he explains how many schools he went to, how many lives he has 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.
You’d let them 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 your 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 can start making serious money.
Value Equation Applied
Above is the Value Equation.
I did not create it. That credit goes to Alex Hormozi.
But Jim Rohn put it this way: “We get paid for bringing value to the marketplace. It takes time,… but we get paid for the value, not the time.”
It doesn’t matter if you are an employee or an entrepreneur. The more value you bring to another business or the more value you bring to your own business, the more you will get paid.
If I valued my minutes in dollars, there would be a cap. There would be an upper limit someone would be willing to pay me just for an hour of my time.
However, there is NO LIMIT to what people will pay to have problems solved and value brought to the marketplace.
A quick walkthrough of the equation:
- 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 time?
- How do I reduce the effort and sacrifice?
Employee Example:
Let’s say I was a writer, and my main KPI (key performance indicator) given to me by my boss is two published articles per week.
How can I increase my value to the company?
Can I double my output to 4 articles per week and get paid more? I could, but that goes back to an hourly mindset.
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 this was my proposition to my boss:
Hey boss, I will keep writing those two high-quality, weekly articles you want. But I want to get more eyes on my articles (increase desired outcome). So I’ve hired a consultant (increase likelihood of achievement) that helps writers like me grow organic social followings that can make content go viral. I’m confident I can double the number of readers (again, increase the desired outcome) to my articles in the next 30 days (decrease time delay). I’ll do most of this in my free time after work, and I am paying for this consultant out of pocket, so I don’t need anything from you (decrease effort & sacrifice).
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 a month from now?
My favorite part of this story would be watching my boss’s jaw hit the floor. If I am successful, I have added value. Value = more pay.
Entrepreneur Example:
So how can we do this as entrepreneurs with our boss?
Who is our boss? OUR CUSTOMERS!!
Let’s break it down.
Desired Outcome:
Let’s say my customer was someone who wanted to start an online business. They want to make good money, spend more time with family, and work from home.
Offer #1:
Here’s what a crap offer looks like: I will help you get to your dream business (increase desired outcome), and I know I can because I’ve helped 1,000 people just like you do the same (increase the likelihood of achievement).
This is what most businesses do, and they STOP! The above is not a good offer. Saying you can get them where they want and using testimonials to prove it is only half of the equation.
What if I did this instead…
Offer #2:
I will help you get to your dream business (increase desired outcome), and I know I can because I’ve helped 1,000 people like you do the same (increase the likelihood of achievement). I can guarantee (increase the likelihood of achievement) you will be making enough money to go full-time in your business in the next 90 days (decrease 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 (decrease effort & sacrifice). After we are done, we will hire and train replacements that work for you instead of always needing us.
From Offer #1 to Offer #2, I went from being able to charge $2,000 to $20,000 or MORE….
So what’s my time worth?
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 are 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,
JM