“Your Money Or Your Life” is one of the personal finance books I read during my undergraduate time. The ideas outlined in the book were new and interesting to me during that time, particularly the ideas of “real” hourly pay and life energy.
If you haven’t read that book, you might be asking what the hell is “real” hourly pay? Is there a “fake” hourly pay? Well, let read on and see whether the answer will surprise you.
The idea of “real” hourly pay is simple; it basically means you need to consider your extra expense and time you incur when you are holding a job when you are calculating your hourly pay.
For example, if you are getting $1,600 a month, working 20 days per month, 8 hours per day, you might come to the conclusion that:
Hourly Pay = $1,600 / (20 X 8 hours)
= $10 per hour
1.) Traveling: 2 hours per day, 40 hours a month
When calculating your “real” hourly rate, you will need to consider the time and money spent due to you holding a job. For example:
Unless you are the minority who are working from home, you will spend some time every workday travel from your house to your work place. Assuming you spend 2 hours per day traveling to and fro your workplace.
2.) Business attire: $100 per month
Obviously you won’t be wearing your T-shirt and short pant to impress your boss and client when you are climbing the corporate ladder. So, let’s assume that you buy a decent business attire every 2 months, and that cost you $200.
3.) Business lunch: $4 a day, $80 a month
Let’s face it, packed lunch at workplace are more expensive than your home cook meal. And we are not even considering the health issue involved if you can only get junk food for lunch around your workplace. Let’s assume that you spend $4 more a day if you buy your lunch from workplace, and in a month, it is $80.
4.) Relaxation: 1 hour and $5 a day
So, you finally finish your work, you sit through the peak hour traffic jam, and step into your house. Are you coming home more energized that the morning and all ready to spend quality time with the family or you are insanely busy at workplace today and you need a beer/popcorn/cake/TV to relax yourself first?
I am guessing here, let just say you spend one hour and five dollars a day to relax yourself after work, which is 20hours and 100 dollars in a month.
5.) Work related sickness: $100, 10 hours per month
Do you have any work-related sickness either physically or emotionally that require long-term treatment? Let’s assume you spend $100 and 10 hours a month to treat or prevent work-related sickness.
6.) Others: $100, 20 hours per month
Any other expense that you think is work-related in your situation? Childcare? Laundry? Housekeeping? Car maintenance? Time spent on fighting with your partner due to stress at work? Everyone’s situation is different and you will have to find out yourself what other expense (either time or money) that occurs because of you holding a job. For the ease of calculation here, I will pick an arbitrary number of $100 and 20 hours per month.
So, now let’s calculate your “real” hourly pay:
Monthly pay: $1,600
Working hours: 160 hours
Traveling: 40 hours per month
Attire: $100 per month
Lunch: $80 per month
Relaxation: $100, 20 hours per month
Sickness: $100, 10 hours per month
Others: $100, 20 hours per month
The “real” working hours = 160 + 40 + 20 + 10 + 20
= 250 hours
The “real” monthly pay = $ 1,600 – $100 – $80 – $100 – $100 – $100
The “real” hourly pay = $1120 / 250
= $4.48 per hour
So, here you are, your “real” hourly pay you are getting now. Is it less than what you expected or more than what you expected? The idea you need to keep in mind here is remember every time you spend $4.48, one hour of your life energy investment is gone forever. I bet you will think twice next time when you see that fancy smartphone that cost you 40 hours of your life!