Financial Geekery

Get your time back, systematically

May 21, 2018

You're a busy professional. You occasionally have to work late or on weekends. Maybe you travel -- maybe a lot. Sure, you're well compensated for the work that you do, but it seems like you don't have any time to enjoy that compensation -- even after work, there's your family, with all the time commitments that entails. And there's your house, which always seems to need maintenance or improvement. And the car. And the bills. And groceries. And personal e-mails. And countless other mosquitoes that drain away your time and energy, bit by bit.

 

But it pays well, right? So you'll be able to retire to a life of comfort, potentially in your 50's. Not that this is plan A -- you like your work -- but you know that as a tech professional, it makes sense to be prepared to retire early

 

And this is true. However, it also makes sense for you to take some of that compensation and buy back your time now

 

Now, some of you are already onboard with this -- you can skip directly to "my personal time-buyback list", if you're just looking for ideas. I can hear some of you protesting, though. "Buy back my time? You mean have someone else do things for money -- potentially a lot of money -- that I can do for cheap or free? That doesn't make sense!" Ah, but it does. Because people like us forget a simple truth: money is meant to be spent. 

 

Let me repeat that: money is meant to be spent.

 

We love the idea of currency. We can take all the things we own, all the compensation for the work we do, and turn it into a number that signifies how wealthy we are. The number goes up, and that's good. The number goes down, and that's bad. When faced with a choice, we can do calculations to see what will have the best (or least-worst) effect on this number. 

 

But this number isn't (just) a scorecard. It represents potential for actual things. It can be turned into possessions, experiences, and...time. Just as we turn our time into money -- we do work, we get a paycheck -- so we can turn our money back into time. And why not? If we have possessions and no time to enjoy them, what good are they? If we can purchase experiences but have no time to actually participate in them, what good are they? If we live "the good life" but have no time to rest, recharge, and clear our heads, what good is it?

 

If we have a large net worth but don't spend it, what good is it?

 

It's hard, but we need to remember that the true score here is not what's in our bank accounts. It's how much fulfillment we're getting out of our lives. We only have so much time -- why waste a second more than we have to?

 

The analysis I suggest for buying back your time looks something like this:

 

First: how much cash flow is available for this? This is up to you to determine, but if you're on track for a decent retirement, have paid off your high-interest debt, have emergency savings, and a decent amount of liquidity (say, less than 50% of your cash flow goes towards nondiscretionary expenses), then chances are very high that you've got cash flow available. (And note that buying back your time is almost always discretionary, so you're not sacrificing liquidity -- you can always go back to doing things yourself if you need or want to.)

 

Second: make a list of all the things you could offload to someone else. If you enjoy it but it takes time, it goes on the list. If it's quick but you hate it, it goes on the list. If it takes time and you hate it, it most definitely goes on the list. See below for specific examples.

 

Third: determine how much it would cost per hour to offload each of those things. You don't have to spend hours getting quotes -- just do a quick search and get a ballpark figure.

 

Fourth: order the list. Start with cheapest to most expensive, and make changes as appropriate. This is going to be the order in which you buy back your time. Logically speaking, it makes sense to buy back the cheapest hours first, and go up from there. But maybe you really like doing something -- it's restful, or meditative, or what have you. You might put that further down the list, and move up something you absolutely hate doing. Not every hour is equal!

 

Fifth: buy back your time! Go through the list in order, buying back your time until you've run out of cash flow you've allocated to buying your time. 

 

Sixth: repeat as necessary. Go through this exercise on a regular basis, e.g. annually when you get your pay raise. Put it in your calendar -- it's ironic but unsurprising that we can get so busy that we forget to set aside time to get un-busy!

 

(Side note: in no place am I assigning value to an hour of your time! This may seem odd to you, so let me explain. It's a pretty simple task to determine what your hourly "wage" is: take your annual salary (including bonuses) and divide by $2,000, and you've got a decent estimate, if you don't count employee benefits and whatnot. But what does that tell you? That's just how much you're paid for an hour of your workweek time. We're talking about your personal time here, which is very different from that! No one decides what your personal time is worth to you but you. This is why I suggest the exercise above: buy back your time, going from cheapest to most expensive, until you're satisfied.)

 

Sound good? Let's take a look at an example: below is my personal list, in rough order from cheapest to most expensive. Your mileage will vary quite a bit, so be sure to run your own numbers! 

 

My personal time-buyback list


Apps: There are web and phone applications everywhere, assisting with a variety of tasks, from accounting to travel to organization to anything information-based you can think of (and many you can't). These are nearly always laughably inexpensive. $5/month for software that saves me fifteen minutes a week? No-brainer.

 

Yard service: My yard would take about three hours to weed, mow and edge, and my service charges $35 per visit -- that's about $12/hour.

 

Grocery service: Now, this is notoriously tricky to determine, because with e.g. Instacart, it's a combination of your fee for the service, your tip for delivery, and the markup the store charges to Instacart. I ran the numbers by taking on the service for a year, then measuring my total grocery expenses (including the service fees) over that year and the year prior, and dividing the increase by the number of hours saved. My total ended up being $40/month for about three hours per month of my time (my grocery store is right down the street, and my kids are really good at helping out) -- around $13/hour, just slightly more expensive than yard work.

 

Delivery service: Of course, groceries aren't the only thing you can have delivered. With the advent of websites like TaskRabbit and Fiverr, you can have someone stand in the infamous Franklin's Barbecue line for you and then deliver it to your door while you lounge about in your PJ's. The rate can vary depending on the contractor, but for highly-rated contractors doing relatively menial tasks such as delivery, I pay around $25/hour.


Maid service: To get my house as clean as a maid would, I'd probably have to spend 5 hours every other week vacuuming, dusting, mopping, sweeping, tidying, wiping down, etc. A maid service that visits every other week would cost me $140 -- $28 per hour of my time. Also, they run laundry and fold it, which is a chore I'm irrationally unfond of!


Virtual assistant: For everything from travel planning to helping me semi-automate my own personal finances, there's my virtual assistant. The company charges $29/hour, and don't tell them this, but I would gladly pay more.

 

Other common items

 

Here are some items that aren't on my personal list, for various reasons, but you should definitely consider for yours.

 

Eating out: This one is a little different from the others. Eating out is a classic way of saving time, but naturally the amount saved varies tremendously based on how many people you're feeding, the complexity of the meal, how far away the restaurant is, etc. Moreover, there are other tradeoffs to consider -- cooking a stir fry at home is a lot healthier than eating at the local pizzeria, and cooking itself is a skill I've learned to enjoy. While I have times and circumstances set aside to eat out, I don't put it in my normal "time-saver" list.


Driving service: Uber, Lyft, public transportation: there are many ways to reclaim the time you spend driving. I don't often use a driving service because I get motion sick quite easily (my kryptonite!); instead, I use that time to listen to podcasts or make (hands-free) phone calls, which I can easily do while driving myself. 

 

Tax accountant: Filing my own taxes takes approximately four hours (I keep very organized records), and it would normally cost $500 or more to hire a CPA to file them. However, because tax planning is a key part of my business, I file my own taxes in order to keep my skills sharp -- there are things you would never learn if you didn't have to actually walk through the process of filing taxes. However, if filing taxes isn't part of your job, it deserves a place on your list.

 

Financial planner and investment manager: For similar reasons, I am my own client; I do financial planning for myself in exactly the same method as I do for my other clients. I do this in order to "eat my own dog food", to ensure that I'm giving the same value and client experience that I myself would expect. Now, every good financial advisor would tell you that it's a good idea to have someone else to help with financial planning, if only because the're not as emotionally invested as you are; I'm in full agreement with this, and as soon as Seaborn Financial onboards another CFP® professional, I'll have them take over my planning account. And if you're not a professional financial planner or investment manager yourself, this is often a no-brainer -- a good advisor can optimize your finances enough to pay for their fees several times over, in addition to getting you back the time you would spend doing it all yourself!

 

How about you?

 

The above is by no means an exhaustive list, nor should you top out at buying your time back at ~$30/hour. Rather, this is intended to get your creative juices flowing! Got any other ideas? Post them in the comments, or send me an e-mail!

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