Open Insights 48 – Balancing Time & Money | Heavyweight Internet Group

I was just talking today with a friend. She called for advice. She had a number of different projects in front of her, offering various career directions. Some provided measurable income, while others were gratifying to work on, and still others offered a larger potential return, but remained more nebulous in the short term.

I explained one method I use to help clarify things. I divide time by total income. It shocks me how simple this equation is, and how surprising the numbers are often to someone, when they really look at it.

A Couple of Examples

For example, let’s say she has a full-time job making $50,000 for arguments sake. Let’s also say that she works eight hours most days, but also works 3-5 hours extra two days per week. We’ll average that to 8 extra hours. She also gets no paid vacation. So, calculators out, 48 hours/week x 52 weeks = 2496 hours. $50,000 divided by 2496 equals $20/hr. If there are benefits go ahead and factor those in, by counting *ONLY* the company contribution.

Another example. I know a few bankers who get into work at 7:30am, and work until 10pm regularly. We’ll estimate a half hour for lunch. They even work weekends sometimes. Let’s say they work every other weekend, 10 hours total. That adds 5 hours to each week. Now you’re gonna say, yeah but they get a handsome salary and bonus. Yep, that they do. Let’s say base is $120,000 and bonus is $50,000. So total is $170,000 for 75 hours per week. Now the first thing I’m thinking is, why not work two $120,000/year salary jobs, and make $240k. But I’m not done yet. Let’s say they get two weeks paid vacation. So we’ll count 50 weeks. 75 times 50 equals 3750 hours. And guess what, that’s $45/hour. Ok granted I didn’t count benefits, but still. Here’s the really interesting part. The base of $120,000 divided by 40 hours (times 50 weeks) comes to $60 per hour!! The extra hours (which in consulting are normally billed out at time and one half because they are more burdensome on your life) 35 times 50 equals 1750 hours for $50,000 bonus paid out only $28.50/hour. I can think of a lot of jobs that pay more.

If you’re going to go ahead and do these calculations, I suggest you include the benefits you get, such as medical and 401k contributions. But let’s also be fair and include commute time as work time. Why? Because if you work from home, you save that time. It’s not to say freelancing is for everyone, but for comparison purposes, it’s worth looking at.

Striking a Balance

So back to my friend’s dilemma. Sure there is more to life than money. There is the time you spend with friends and family, or on your own leisure pursuits. Or perhaps you have a side business you are working on, or a million other reasons. You certainly have to balance all these factors. How much money you’ll make can impact how much time you have positively or negatively, but if the job kills you, it may impact your well-being in other ways. So sure, go ahead and consider everything, juggle and balance in a way that is right for you. But don’t do it without all the facts, and figuring out your hourly rate, is one eye-opening exercise you won’t regret.

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In our last interview we had the opportunity to talk with Norman Yamada CTO of Millburn Corporation.

Norman shares with us his experiences providing world-class computing solutions, and the pros and cons of doing it with open source.

We’ve also moved our podcast to Odeo for Audio Podcast hosting. It is a great service, and provides all the RSS and subscribe links automatically. So please subscribe if you haven’t already!

4. Current Reading

Globalization and It’s Discontents by Joseph Stiglitz

If there were ever a time to discuss some of the more troublesome aspects of globalization, now would be that time. Stiglitz’s book is an excellent antidote to always shiny-happy Thomas-Friedman-world-is-flat optimism that I suspect is quickly falling out of favor these days.

5. Lightweight Humor

A little inane humor to brighten up your day… Jessica Hagy has this cute little blog called indexed. She uses index cards to illustrate little truisms, often with funny comments on venn diagrams. Here’s a funny one the relationship of status to money.

6. Miscellaneous

We all want to optimize our sites for Google. I mean other than a select few, that’s where most of our traffic comes from, so the more our site plays well with Google, the more users, readers, customers, and clients will find their way to us.

Most of the SEO material I’ve read has been pretty sparse, and unclear. But I’ve been following the topic over at my good Felix’s #comments blog, and I’m starting to get it. So you can too! Take a read: Google loves me, again!

If you haven’t been following the news on the topic, take a look over at this NY Times piece: Silicon Valley Start-Ups Awash in Dollars, Again. Personally I don’t think there is much hysteria this time around, sure there’s some, but not much. The industry is more mature now, and computers in general have lost their initial wow factor, so people are general more sober, and able to step back and see what is actually useful, can make money, is making money, or might well make money. That’s the root of investing smart.

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Issue 47: Change the Problem

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Issue 45: Contractualities

Issue 44: Gaining Legs

Issue 43: On Prudence

Issue 42: On Efficiency

Issue 41: Roshomon Effect

Issue 40: Self Taught

Issue 39: Reputation Management

Issue 38: Are You Fast Failing

Issue 37: A Real Open Book

Issue 36: Rarity of Excellence

Issue 34: Hindsight Is Always 20/20

Issue 33: Market For Experts

Issue 32: Different Heritages

Archive: Past Issues

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Oracle DBA Interview: click here

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9. About Heavyweight Internet Group

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Open Insights 48 – Balancing Time & Money

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