Is Your Time Worth Something to You?
Most People Say Yes!
Time is a value that we put a high cost upon, but why? Our time is very valuable, and most people would agree with that. So how do we know how to calculate the value of our time?
If we know the value of our time, then we are then able to make better decisions for ourselves, which will ultimately help us be more productive. The idea of calculating the value of our time and money … and even the value of something at zero cost … helps us to understand the opportunity cost of everything.
Being able to value and understand our Time and Money will ultimately help us to make better decisions for ourselves and become more productive.
Value of our time is calculated by many things, namely:
Time you could have used to do something else.
Opportunity cost for the time period spent.
How important is time to you?
Value the time lost at work due to distractions.
But the best part is that adding this value to your life can empower you to make better decisions.
In Money Terms, What's Your Time Worth?
It is a simple question, but one that we rarely respond to honestly. We often don’t think to do a time-value-of-money calculation until we’re forced to do so, leaving us with most of the work to be done.
Vicki Robin, author of Your Money or Your Life, discusses the importance of your time in this video: In Money Terms
There are many ways to value your time, including multiplying a salary by new-half-life. The method that I prefer involves a future value calculation with interest-based on a carefree withdrawal rate. For most people, the time spent generating that value is worth far more than the time spent withdrawing it (and that’s not including interest).
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