You’ve got two job offers. Job #1 pays $95,000 a year and job #2 pays $105,000, which do you take? Easy, right? You take job #2. In reality, however, the choice is seldom that easy.
Happen to see that crappy Justin Timberlake movie In Time? Hopefully not, it was pretty bad. The underlying idea, however, was interesting. What if time, instead of only metaphorically, was quite literally money? In the movie people live freely until the age of 25 at which time they are given a set amount of time to live — I think it was a year. That time is displayed on their wrist and they can earn more by working and they use the time as their only form of currency. A taxi ride might be 2 hours, groceries 5.
Again, the movie is pretty terrible, but the premise is interesting. How do you value your time? You might waste five minutes here or there, hell you might blow a few hours without even thinking about it. But, what if you were aware that your time was limited? What if you treated time as a resource? The most successful people I know do exactly that, they value time more than anything. More than money, more than their worldly possessions.
Time is your most precious resource once you spend it it’s gone, and you sure can’t earn it back.
Back to those two jobs. Lets look a little closer at the two:
- Job #1
- Pay = $95,000/yr
- Hours = 40 hours w/ flex, no out of office work
- Location = 2 miles from current residence
- Job #2
- Pay = $125,000
- Hours = 40 hours w/ flex, out of office work
- Location = 30 minutes from current residence
The choice, as you can see, is quite easy. Take the extra $10,000 a year right? Not so fast.
Job #2 requires you to commute 45 minutes twice a day for a total of seven and a half hours a week. Let’s say you got a very sweet four weeks of vacation so you work 48 weeks a year, you’ll spend 360 hours a year in your car. That’s 15 entire days or 45 eight hour workdays gone, not counting unexpected traffic delays.
At $125,000 a year you might value your time at around $60-65 an hour. Multiply those hours in the car (360) by your hourly wage ($60) and you’re “spending” $21,600 a year to commute. Add in the “commuting sucks” tax, car maintenance, etc… and the total is even higher. Oh, and the average American spends around $4,000 a year on gas. Lets say a conservative 50% of your gas costs go to your commute and your still spending an addition $2,000 just to show up to work.
Job #2 also comes with a laptop and cellphone so that you can “keep things running smooth from home”. Let’s say you spend 1 hour two days a week responding to emails, taking calls and handling emergencies after hours from home. That’s another $5,760 of your time over the course of a year. If you value your time Job #2 is starting to look more like:
- + $125,000
- - $21,600 commuting time
- - $2,000 gas cost
- - $5,760 at home work cost
- = $95,640
Now, let’s pull the offer out of the trash and look a little closer at job #1. Job #1 doesn’t require a commute in fact it allows you to commute by bike as it is close and doesn’t require any highway travel. In actuality, you find you’re saving some gym time by getting 4 miles of bike riding cardio in every day for a total of 20 miles a week. You’re saving commuting time and most if not all of that gas cost. Job #1 also requires no at home work. No cellphone, no laptop, no emergencies.
That perceived $30,000 pay gap is starting to disappear pretty quick. Do you take the extra $640 a year and the added stress that comes with it?
Obviously the comparison is not that simple. We didn’t account for the fact that job #1 does require some commuting time, or that you might not be interested in exercise or riding your bike to work. Maybe job #1 is boring, maybe job #2 has more opportunity for progression, maybe one job has benefits that are significantly better than the other.
The comparison here is obviously imperfect, but the idea is not. For a successful, fulfilling life you need to begin to factor in items that are less tangible than money. Bank statements are important but thinking about overall life experience is arguably much more important.