What's Your Time Worth?
Simple questions can be deceptive, but they also can be enlightening.
When it comes to personal happiness and financial freedom, I've found an introspective approach to be helpful when considering these important questions:
No. 1: Who’s going to manage your money?
No. 2: What services should others perform for you?
No. 3: What makes you happy?
Managing Money: DIY or Professional?
The first and possibly most important decision in money management is deciding whether you’re going to do it yourself – or engage an advisor.
The Do-It-Yourself (DIY) approach begs the question, What is my time really worth?
Could I pick the best money managers and succeed as a wealth advisor? Perhaps. But is that what you’d like to do? Or are good at? And, what is the trade-off?
If you calculate what your time is worth versus paying a fee to someone, you can approach the issue of cost from a more holistic perspective.
A friend of mind had another point-of-view on DIY money management: She believes Wall Street has become too sophisticated for even the above-average DIYer. Given the recent chicanery in the financial markets, she’s convinced she needs someone who understands the game as the big hitters do. “I’m playing to win. I need an All-Pro team on my side.”
What To Outsource?
Outsourcing is a straightforward equation for successful businesses: Do you build it or buy? Which core competencies need to be in-house? And, which can be provided by third parties?
The same can be applied to our personal lives.
The benefit of outsourcing is that it saves you time and adds outside expertise – whether you’re an individual or a business.
The big mistake is assuming we can be terrific at everything. As much as we’d like to think so, it is unrealistic to believe we’re omnipotent and have unlimited time. Smart people pay good people to complement their skill sets and save time.
What Makes Me Happy?
A lot of research has examined the source of happiness. After we get above a certain level of wealth, research shows that more money doesn't make us happier. More time does. Time to spend with people we love and do the things we want to do.
If you want to pursue your passions, isn't spending some money to hire a helper an effective way to preserve your precious time – whether it’s cooking or running errands? Or other messy tasks that complicate your day?
Personal outsourcing can be a tough concept for people in the middle of wealth accumulation. It feels a bit pretentious. But the alternative is not so good, either. If you wait until you reach your magic number, you could be too late.
How Many Hours Left?
If you die at 80, you will have lived 31,025 days. At 50, you have already lived 18,250 days. That means you have only 306,600 hours left – or 12,755 days.
We all can make better decisions if we honestly answer what our time is worth, especially when choosing service providers. The process requires humility, but the results are guaranteed to be enlightening.