What is Your Time Worth?

Hi there ! Hows is everyone doing this Monday? I thought I should write this article in interest of public good. The inspiration for this article comes from a lunch conversation on Opportunity Cost with two of my classmates and friends Prithvi and Tushar. It’s funny how a simple conversation on daily struggles of student life can strike inspiration for in-depth conversation which is an article that not only has a philosophical but also a practical aspect to it. I used to consider myself a busy person prior to being a student and I realize that what I’ve seen was nothing compared to student life. I literally have to choose between cooking at home , doing laundry and finishing assignments now.Student life makes you understand what strapped for time truly means. With that being said what is the time-value of an hour of our time? What is the price of each day in school? How much are we really paying here? 

How much is your time really worth? No I mean for real. This is not a rhetorical question. Can you put a number ? Ballpark? How precious is your time ?  In this blog post we will talk about the value of time.Opportunity cost is defined in academia as the “forgone benefit(add credits: investopedia)”, a.k.a the amount you miss out on if you were to not do what you would do instead. Understanding the impact of missed opportunities foregone by choosing one time investment over another allows for better decision-making.Every morning we waked up to the gift of 24hrs of time. But have any of us consciously assessed how we allocate that time. We are living on fixed time and unlike money we can never earn back lost time. Yet , it’s unfortunate how little value we assign to time. Let’s start off by assigning a price time to our time.  This would often change based on your time commitment, your social life, your earnings and most importantly your priorities in life. We often pay a huge price for things that matter the least? You want an example? Hmm let’s see , when was the last time you binge watched something on Youtube, oh yes the platform is free for the most part( excluding Youtube premium costs to go ad-free) but you pay with your time and help drive the business value and boost retention.Recall how Netflix checks on us more than we care “Are you still here”. I mean I could go on but you get the point.Well you may ask me where do I even begin? Since time is more precious that money, why don’t we deep dive and quantify time. For this calculation we will start with a conservative estimate for a persona who is currently a student and not having any income.

What is one hour worth?

I asked this question to many of my friends and colleagues and even my professors in school. But this feels like a really bizarre question to most people as we never thing of time in terms of money. Yes I know what you’re thinking about the over-use phrase “ time is money” but I strongly feel that is an understatement. Money can always be earned but but time cannot. So the new phrase should be “time is time” its finite, limited and not recoverable. It’s more expensive than any non-renewable resource on this blue planet and despite that most of us are often guilty of not using our time effectively. A philosophical touch, we never realize how precious something is till we lose it. Think of all the lost opportunities, your childhood, youth and loved ones. I know you will say , hey loss is a part of life. I agree we all have to cope with loss in some or the other form, this loss could be small or massive. From losing a pair of earrings to losing our peace of mind we all experience loss every day in our life. We live on auto-play , some of us might be creatures of habit and some of us might just be letting external forces taking over our routine and most of us are oblivious of how we are spending our time. I think it’s important to realize and be mindful of our time. Now that I have rambled on a few paragraphs let’s look at some real math. We are going to look at some excel and tableau dashboards to understand how time is perceived by various cultures around the world, how incomes and opportunity cost varies by region and what choices have led to the most optimal returns on investment. Let’s calculate the time-value. A special thanks to James for opening my eyes to the time value math , I have referenced your work and built on top of it.Like you I was also quite surprised by how low an hour of my time was.Its $42 after adjusting for inflation at 10% and $46 is a conservative estimate after adding the unaccounted expenses and splurge purchases. I mean we all say that as students we should not Uber unless it absolutely necessary but we are all addicted to basic comforts and luxury. I think value and time are too personal of a decision to quantify but nevertheless I am going to make an attempt. 

Calculation

How much is a minute worth for you? $0.8 for me

For the sake of brevity I would say that , this number is just a number and you are wise enough to know how much your time is worth. I will talk more about the model for this calculation and an in-depth explanation for why I came up with these numbers in Part2. I would love to hear your thoughts to help me better prepare for the Part2. Please feel free to DM. P.S. I never ignore In-mail requests, don’t worry using your limited number of In-mail credits in case we are not connected.

Akansha

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