If You Feel You’re Not Making Enough Money, Read This
I’m not talking about creating other sources of income
$50.
No?
Then $1000.
Also no?
All right $100,000 then.
How much money is too much money for you?
Think about how you would have answered the question when you were a child.
I bet you go by how much you make monthly. At least that’s how I do it.
And when we do that, we are making a big mistake.
We are thinking in terms of work. The effort. And not in money itself.
Of course, we don’t calculate in minutes or hours, but in monthly salary.
This is too inaccurate for me.
Why Albert Einstein already knew that time is relative.
If you believe the saying, time = money.
However, money must also be relative.
And of course, it is.
If you sit with a girl for two hours, you think it is one minute. If you sit on a hot stove for one minute, you think it would be two hours. That’s relativity. — Albert Einstein
Rich people don’t know the value of money
How much money is worth to you depends on how much money you have and how hard you had to work for it.
This is also one of the reasons why lottery winners and rich people don’t know how to handle money.
Money has no value to them.
Because converting money into time doesn’t work if you get the money without using the time.
When we save for a vacation or for a new TV, we think about how long we need to keep the change.
As you can see, many people don’t know their real hourly wage.
Know how much you earn per hour
Self-employed people know their hourly rate. But they still don’t know their hourly wage.
What is the difference?
The hourly rate is what you charge your clients. The hourly wage is what you have in your account afterward divided by the total time you had to work for it. That is, after deducting taxes.
In addition, all hours of work that cannot be billed directly to a client are added to the time.
Fixed costs paid to maintain independence must also be deducted from the hourly rate.
In the end, a small amount comes out.
This is also the reason why some freelancers charge over $100 per hour.
Corporate workers are dumbfounded. Because that is a lot.
Only they forget that freelancers have to pay for themselves and their work equipment.
Depending on the industry and the workload, sometimes only $50 is left.
But what about corporate employees?
Pretty simple.
You think: net salary / hours worked = hourly rate.
Obviously, this also includes the time and costs you need to spend to do your job.
Do you drive an hour to work and an hour back every day?
That counts for working time in this calculation. The lunch break actually does too.
Do you need a train ticket to get to work? You have to deduct that from your net pay.
This is about considering all the costs and any time you would not have without your job.
If you add it all up, you get your actual hourly wage.
If you make $2,500 net per month and you have 30 vacation days per year. There is an average of 21 working days in a month. So on average, you work 18.5 days per month.
The calculation is: 21 x 12–30/12 = 18.5.
Let’s say you work 8 hours a day and have a 2-hour commute and a 30-minute lunch break. Then your working time is 10.5 hours a day.
That is 18.5 x 10.5 = 194.25 hours per month.
Let us further assume that your travel expenses to work are $100 per month. Your actual net salary is then $2,400 per month.
So divide $2,400 by the 194.25 hours.
Your actual hourly wage is $2,400 / 194.25 hours = $12.36 per hour.
Time is money. Money is time
Now you are ready to calculate how long you need to work in order to afford anything.
If your actual hourly wage is $12.36/hour. Your pure working time, without breaks and travel time, is 8 hours per day. Then you earn $98.88 per day.
If your apartment costs $600 per month, including additional costs. Then you will have to work 6 days a month just to pay the rent.
In any case, you no longer depend on a unit of exchange like the dollar.
Whenever you have to decide whether something is expensive or cheap, all you have to do is calculate the time you have to work for it.
The question then becomes: is buying product X worth the investment of Y hours of your life?
If yes, then better buy it, if no, time is saved again.
Read this
Money is just a voucher that was introduced because time is so hard to give and sell.
The value of this voucher varies.
The value of your time, however, does not.
If you want to buy a product and pay dollars for it, it doesn’t matter how much the product currently costs in dollars. It is with the time that you will pay for it.
We rent an even bigger and more luxurious apartment, only to have to work even harder and end up staying even less time in the apartment.
If you are striving for financial independence, this approach is attractive.
After all, financial independence is the number of hours you don’t have to work for money.
So financial independence is about time, not money.
Become a paid subscriber today and get access to all the content for only $3 a month or $30 for a full year. Offer valid until Oct 21. You can't miss it. See you in a bit.