hipnetic said: Here's a tip related to an experience of mine: Make sure when you're calculating a ROI that you're not leaving anything out. My example:
Last fall my landscaper wanted to charge me over $300 to do fall cleanup (mostly blowing leaves into the woods surrounding my property). The prior year, I watched them (about 4 of them) do the job using 2-3 backpack leafblowers and one push-behind leaf blower. I think it took them a couple of hours. I figured, hey, that's not too hard. I looked into blower options and decided to buy a contractor-grade backpack blower for about $500. Adding in the cost of fuel, I figured it would only take two years to pay for itself. I figured if it took them 1.5-2 hours to do the job, maybe I could get it done in 6.
Well, it turned out to be a *LOT* more work and consumed a *TON* more gas than I thought it would. It may be that my approach was way off (so lack of a skill could be a factor), but I think I just underestimated how productive they were actually being with the extra guys and machines. After working on the yard for several days (2-4 hours per day) and burning through a whole case of 50:1 fuel, I found myself regretting my money-saving decision.
On a similar topic, I feel like I *have* made a wise decision since being in this house to pay landscapers to handle my regular lawn maintenance. I feel a little guilty when it comes up in conversation that I pay someone to mow my lawn instead of doing it myself, but the math never made sense to me because: 1) My lawn is quite large 2) The guys I use seem very reasonably priced (though I still think their fall cleanup quote seems high considering most of the guys are probably getting paid very little per hour/day) 3) My 2-car garage is very small and has no spare room to store a suitably-sized lawnmower. Buying a lawnmower might require also buying a shed to store it. 4) My lawn isn't a rich healthy super-green all-grass lawn, so it grows pretty slowly. I can delay starting the mowing season quite a bit, and most of the summer it only requires a mowing every other week.
Even if I *could* squeeze a mower inside my garage, a decent ride-on zero-turn mower on the smaller side would cost me about $2000. Totaling up the cost of the mower, gas, occasionall tune-ups, and the gray area of the "value of my time" and then comparing that to what I pay my landscapers x the number of times I need them to come, it would take several years to see a ROI if I bought a mower and mowed my own lawn.
It would be even better if I could find a guy who offered to mow my lawn, did the work without a contract in place, and never got around to billing me until a couple of years later. I have started to be of this mentality as well. Particularly if it is not a job I enjoy (see cleaning). It is fairly simple. If I would earn $X in the time it would take me to clean the house, and someone else could do it (and bring their own supplies) for less than $X, it is a no brainer. If I really don't like the task, I put a multiplier in front of X.
While speeding up movies isn't horrible if you can tolerate it and choose to do it yourself, the idea makes me grimace. Mostly because some TV stations are now speeding up their TV show playback slightly so they can have more time for commercials. Compare the play time of the episodes if you can't tell by the audio alone.
It's jarring when you like a particular actor's voice all season and then recently it sounds like they've inhaled some helium. :/
When I was young, and I do not have too much money , the time is useless to me, and I will do the things by myself. When I get older , I have lots of money, I pay the money to hire someone to do things becuase I wan to save my time.
I bought a wood-fired oven to make pizza. A pie used to bake for 6 minutes in my home oven, but now I can bake pies in 90 seconds. That means I can feed a large party of people in a relatively short period of time.
"The time-and-money calculator Mr. Bram used, on ClearerThinking.org, has users set a floor, or market value, for their time by dividing their total compensation by the hours they work. Users also answer questions about various time-versus-money trade-offs they would be willing to make, such as how much an additional part-time job would have to pay for them to take it, or how much they would be willing to spend on a timesaving tool or service.
The calculator reports inconsistencies in users’ thinking. For example, a user might be able to make $50 an hour by doing additional part-time work but refuse to pay a company $30 to do a routine errand that would free up an hour of his time, even though he could pocket $20 by doing so, says Spencer Greenberg, New York, founder of ClearerThinking.org."
"Mr. Greenberg, a mathematician and co-founder of a hedge fund, says he got the idea for the calculator after watching a friend who makes a six-figure salary “wracking her brain trying to figure out how to use a $20 gift certificate,” he says. “She essentially lost more value just making that decision than the value of the gift certificate.”
"Emily Oster encourages students in her college microeconomics classes to factor “opportunity cost” into their time-use decisions. By choosing to use time in a certain way, they’ll have to give up other activities, says Dr. Oster, an associate professor of economics at Brown University. If hiring help “buys you an extra half hour with your job or your kids, it’s worth it, even if in principle you could do it yourself,” she says. She hires help with laundry and grocery-shopping to free time to spend with her 4-year-old daughter.
Still, this is a difficult concept for students to grasp. They readily understand that money spent in one place can’t be invested elsewhere, Dr. Oster says. But “when you take another step and say, ‘This is something you should apply to your life, to think about your time having value?’ This is hard.”
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