At one of my first internships at internet company called Freemerchant.com, I was having a chat with the CFO. We were talking about building wealth.
He asked me why I wanted to have money and what I thought money would give me? As a starry-eyed and naive 20-year-old, I rattled off a whole list of material possessions, most of which I really don’t care about at the age of 38. And he said something to me that has stayed with me to this day:
“What money gives you is time. And time is really the most valuable asset at your disposal.”
As I’ve said before if you want to manage your time effectively, put a really high dollar value on it.
Just think about all the things that we waste our time on each day:
- Commuting to work
- Screwing around on the internet
- Running stupid errands on the weekend (i.e. grocery shopping, Bed Bath n Beyond, and Home Depot Runs)
Now imagine if you didn’t have to do any of those things because you could afford to hire somebody to do all of them.
When I moved into a new apartment and I bought two bookshelves, a nightstand, and a bed, I thought about assembling them myself. From past experience, I knew that it would be a half day ordeal at best, and take an entire day at worst. Not only that, anytime I build stuff from Ikea parts are left over and shit starts falling apart weeks later.
I looked at what I had been paid for a few previous speaking engagements and looked at what it would cost to have somebody on Task Rabbit come over and build this stuff. The cost of hiring these people was a small fraction of my speaking fee. They did in 3 hours what would have taken me an entire day, and I was able to use that time to work on my upcoming book.
A couple of months ago I made the mistake of going to an outlet mall to buy a sports coat. I went from shop to shop, couldn’t tell if anything truly fit, and after about 3 hours I left in complete frustration without a sports coat. Someone on Facebook recommended that I utilize a personal stylist at Nordstrom. What most people don’t seem to know is that this is completely free. You submit your needs and a stylist will have a dressing room ready for you with clothes to try on. If you’ve never been before, they’ll even measure you to make sure your clothes fit perfectly. It saves you a ton of time and you end up with better clothes.
Another “time hack” I stumbled upon was TSA precheck. As a speaker, I travel quite a bit. After a 30 minute wait in security at the Portland Airport, I finally decided I’d had enough. The cost for this is 85 dollars for 5 years. By walking through security in 5 minutes, I get straight to the gate or to a restaurant where I can sit down and do my work. To top it off you avoid the chaos and frenzy that results from waiting in line. Since your state of mind is one of your most priceless assets, this is an easy way to preserve it.
In economics, there’s a concept known as opportunity cost. For example, the opportunity to cost of assembling all the furniture myself would be the time that could have been spent writing my book. The value of working on my books or anything related to The Unmistakable Creative was far higher than the $200.00 that I spent on Task Rabbit.
Let’s do some math to reinforce this idea. Say that your time is worth 200 dollars an hour, which comes out to 1600 dollars a day. Say you decided to do a task that could bet outsourced (i.e. building a web site, admin work, Ikea furniture). It takes the whole day to do that task. Assume it would cost $200 to have someone do whatever you needed them to do. You decide to do it yourself and save 200 dollars. The opportunity cost is $1400.00
Sometimes we think we’re saving money by doing things like this ourselves. But we don’t take into the account the opportunity cost of doing things we’re not competent at.