Author, speaker, ENTREPRENEUR, Coach, and Consultant
“Time is a created thing. To say, ‘I don’t have time,’ is like saying, ‘I don’t want to.”
While I was running the day to day operations of my Division, as the top producing Division in the company for over 2 years, I was also embarking on several opportunities for personal growth and development. During this same time, I was writing my book and managing my interests in a few businesses. Oh yeah, and I am a father of two and a husband with all those responsibilities and obligations. I am not much different than many of you.
So, to keep my projects moving along, while ensuring I was getting my job done, and keeping up with my daily responsibilities, I had to find a way to be very efficient with my time. And, most importantly, I could not succumb to the age-old excuse, “I don’t have time”. The key difference for me was, I had spent a fair amount of time on learning to manage my time and even more importantly learning the value of my time.
I once went through an exercise with a coach that challenged me to record everything I would do every day in 15-minute increments for a week. I can tell you that was a very challenging exercise, while being equally eye opening and insightful. Although it was painful and frustrating doing the exercise, it was even more frustrating to review the results. You see, I found that I was only really working effectively about 2 or 3 hours per day. The rest of my time was taken up with mindless tasks, phone calls, email, meetings, etc.
Now you can imagine that did not set well with me, particularly because the first exercise I learned about Time Management was to calculate your annual salary and divide by the number of hours and see what your time is worth. This most basic example of this exercise is to take your annual income and divide it by 2000 hours (assuming 2 weeks of vacation). For example: $100,000 / 2000 = $50 per hour, is what your time is worth.
At this example’s most basic premise, you should only do tasks that are worth $50 per hour to ensure you are not “Wasting your time”. For instance, for someone worth $50 per hour to work on a task someone could be paid $15 to do, that would be a waste of that person’s time and resources. Hence the idea of delegation. And this is valuable to introduce the idea, but now be prepared to have your mind blown…
There are two more elaborate components to add to this exercise to get the true value of what your time is worth. So, your $100,000 salary example, is just what your employer at your “Day Job” has valued your role at, that is not necessarily what “YOU” are worth. So, let’s take this a step further, $100,000 may be your salary, or total compensation for your day job, but what other skills do you have, and what are those skills worth? Most importantly, what do you want to earn, if you are setting and income goal of $150,000 or $200,000, what would that make your time worth? That would be $75 or even $100 per hour. Now how valuable is your time?
And, let’s go one step further. As I shared with your earlier in my example of recording my time each day, I realized that most days, I am really only working about 3 hours per day. Now, I may be doing tasks and activities that are required of my job, but the most important stuff I do, what only I can do and needs to be done by me, only takes about 3 hours per day. So even if I am working 10 hours, likely, the rest of my day is taken up with other tasks that could and potentially should be delegated to someone else.
As crazy as that sounds, if you do your own exercise, I am certain you will find similar results. Now it will certainly vary by day, but generally it will be similar. I went so far as to research what other executives had to say about this information, and one of the first people I found was Warren Buffet himself, who suggested that the average CEO probably only spends 30% of their time effectively. The rest of the time is taken up with meetings, emails, phone calls, etc.
So, what does this mean? Well, if you have a goal of making $200,000 per year, and you know you, like most people, are only productive 33% of the time, that means your time is worth $333 per hour. Here’s the math: 2000 hours * 30% effective time = 600 effective hours. $200,000 / 600 effective hours = $333 effective hourly rate. This means unless what you are doing in that moment is worth $333 for a minimum of 3 hours per day, you’ll never attain your goal of $200,000 in annual income.
So, what is your time worth, regardless of which example you use, you can see that this really challenges you to look at your time more closely and consider, “Is what you’re doing right now, worth your time?” This is huge for managing your time effectively. When it comes down to how you are using your time, are you recognizing your times real value.
And the bigger question is now; “Now that you know what your time is worth, what will you do differently?” While you are pursuing that goal of attaining a certain income goal, or developing a new marketable skill, or start that business, and you are battling with staying focused and not playing another 30 minutes of yet another video game on your phone, will this make it easier to say “No” to those distractions, so you can maximize your effective time and ultimately get the best return and keep you on task to achieving your goals in life.
Eric Whitmoyer: Entrepreneur, Consultant, Speaker, Coach and Author
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