The Value of Your Time
I really didn’t do much in the way of “work” in the year 2006 until November rolled around. I had a great vacation, but it quickly came to the point where I needed to get back into replenishing my savings and building my businesses. After all, even though my living expenses are pretty cheap, they’re still there.
In the 6 years that I’ve been out of the Navy, I’ve done a number of things to make a living. Finishing college was a major life goal, and I managed to turn college attendance into a profit stream. I’ve also done mystery shopping, merchandising, nuclear and hazardous waste contracting, insurance hazard inspections, and a myriad of other tasks.
The problem with a lot of these kinds of things is this: The low dollar value of the task. Here are some examples:
- A typical mystery shop, where you evaluate the customer service at a retail location of some sort, might pay $5-$15 on average. Some pay upwards of $100, but they’re fairly involved. The per hour rate from mystery shopping for me worked out to about $10 an hour.
- Something I’ve done more recently, since obtaining my real estate license in April 2006, are Broker Price Opinions. These are typically done on behalf of mortgage lenders and equate to a Comparative Market Analysis. It’s cheaper to have a broker do these than to order a full appraisal. I can typically expect to be paid $50-$65 for a BPO, which requires a visit to the property to take a few photos and make repair estimates. On top of that, I have to find sold AND listed properties (through the MLS and property tax records) to use as comparables and essentially perform an appraisal to arrive at a market value for the property. I like to do them right, and can easily put two to three hours into a BPO. This breaks down to an hourly pay rate of $16-$32 per hour.
- Packaging hazardous waste in an anti-chemical suit in the sweltering heat pays $12-$18 an hour.
- Insurance inspections typically pay $15-$20 each, and I can usually knock out several on a route. To be thorough takes about half an hour, plus travel time and entering reports online. Typically, I can average $15 per hour doing these.
There’s an old saying in business that goes something like this: “If your goal is to make $100 per hour, you need to stop doing $10 an hour work.”
One of the problems with insurance inspections, BPO’s, and similar work, especially in my part of the country, is that there just isn’t ENOUGH of it to make a living. Although the per hour pay, from the perspective of your average worker, isn’t necessarily bad, there just isn’t the volume you need to make a living. I’ve basically discovered that such work is great for somebody that doesn’t need to make a lot of money or doesn’t want to work a whole lot. For most of the past several years, that’s been me. I either had other sources of income that produced the bulk of my income (such as nuclear work) or I simply didn’t want to work and was in a position such that I didn’t have to all that much. In fact, I think I’m eventually going to write an e-book on the subject of all the varied ways I’ve discovered to make extra, part-time money.
But, now days, I think a bit differently. I can live just fine at the income levels that I’m used to ($35k-$71k per year), but I have the goal of retiring early. Very early. Say, in 5 years. Also, I eventually want some land out on the flats of central Colorado with a nice, contemporary style home, not the small downtown condominium that I live in currently. Add in the fact that I’d like to dedicate a good portion of my life to public service in the political arena, and it quickly becomes obvious that finding the road to financial independence is crucial to achieving the things I want to do with my life.
I hope all this doesn’t come across as materialistic, because I am anything but. I just think there are better things to do with my limited time on this world than spend it all in a cubicle.
I promise, I am getting to a point. And the point is this: I have to quit doing $10/hr, and even $30/hr, work. In fact, based on how I want to live my life, the number of hours per week I want to work, the amount of travel and playing I want to do every year, and how much real estate I desire to acquire in order to fund my future retirement, I actually need to be doing more along the lines of $150-$200 per hour.
I would encourage everybody reading this to make the same evaluation of your own time.
James, my real estate mentor, is great with this sort of thing, and has perfected a system whereby he either massively computer automates elements of his business or hires other people on a project basis to complete tasks. He also has, over the years, assembled his real estate dream team in Florida that allows him to do real estate deals smoothly and with significant delegation of tasks.
I used to run a flat-fee MLS listing service, for example. For a one-time fee of $197, I would allow For Sale By Owner properties to be listed in our regional MLS to increase their exposure to a greater pool of buyers. Here’s what I discovered out of that first process: I needed to automate every single aspect of it. Between pulling comps, preparing the listing contract and other documents, visiting with the family, taking pictures, entering the information into the MLS, and other tasks, I spent roughly 4 hours taking one listing. Since my employing broker keeps 35% of the take, I just made $32 an hour.
Is that a good pay rate? By most standards in the United States, YES! But there are two problems. First of all, I would have to take 781 listings per year just to make a six-figure income, which is simply impractical. Secondly, my market research indicates that, at best, I could conceivably obtain 10 listings per month for this flat-fee MLS concept.
How do I fix it? I convert the web site to a long copy sales letter, allow people to pay online, upload their own photos, download the listing contract and mail, fax, or email the signed copy to me, and have them fill out a copy of the MLS listing sheet directly online for me. Then, all I would have to do is copy the listing data over, rather than having to hunt for it all, file away the contract, and a few small administrative tasks. Total time: Less than half an hour. Hourly pay rate suddenly jumps up to: $256/hr.
I like that much better. 
Yours in success,
_