Shut Up And Take My Money!

I'm sure we've all seen this meme pop up somewhere in one of our social timelines recently. It's a humorous concept that something would ever be so provocative that it would evoke the response within a person of casting our primary form of currency in appreciation, but the truth is that we all recognize on some level exactly what that "something" is. We tend to call that something "better."

Because I know that the last sentence was a bit esoteric, I'll elaborate with an example. The Department of Motor Vehicles is the quintessential example of government inefficiency. I would love to see a statistical analysis of the average man-hours are wasted at United States DMV's every year (from what I hear, this example won't necessarily translate for my friends in different parts of the world, so if you fall into that category, just substitute "DMV" for whatever your country's particular model of government inefficiency is). With very few exceptions, anyone who's ever experienced a US DMV will almost certainly be able to without hesitation recall at least one DMV horror story. Whether it's a cranky employee, over-convoluted process, or a lack of available information, these horror stories and their associated negative emotions have created an apprehension within the collective national subconscious against the idea of having to step foot into the DMV. If you doubt this, just go into any public setting and say aloud "I love going to the DMV" and watch the stares you get (if you feel like living dangerously, try announcing "I work at the DMV.")

That being said, it's little wonder that the only reason the DMV is still is in operation is due to the fact that its existence is essentially mandated by the government (I say "essentially" because there are some legal/constitutional caveats to that statement). Setting aside for a moment the human tendency toward corruption, if a law were to be passed tomorrow that forced DMVs to compete with private entities moving into their arena, three things would happen:

1. Customers would choose whichever entity provided the better service
2. Service would improve
3. Entities that failed to improve/compete would go out of business.

So what does that mean for we, the business minded?

As I write this, I'm currently stuffed into a airline seat with my wrists at an awkward angle to the keyboard because the standard seating size on a modern airline is apparently only designed with toddlers and petite people in mind. One of the reasons I tend to gravitate toward this airline is due to their price structure regarding baggage and priority boarding. Although these two aspects of the airline stand head and shoulders above their competitors, the ever shrinking seat sizes on not just this, but all airlines leave much to be desired. As I sat here in my microscopic seat, I found myself beginning to ponder upon what my options are for more practical cross-country travel. I came to the conclusion that until high-speed rail becomes as ubiquitous in this country as it is in other parts of the world, my only option is to spend more money for a better service.

And there's the rub. If you want better it almost always costs more; whether it be more time or more money. The more money part is easily understandable, but the more time part can get slightly more convoluted. For example, my wife and mother-in-law are serial deal hunters. They will sign up for email newsletters from their favorite retailers and shop at exactly 6:42 PM on the third Thursday of every other summer month if that means getting 30% off that cashmere sweater that they've been eyeing. For me, that's way too much effort, but apparently that's what it takes to get the deals. That's the perfect example of the time-cost factor.





On the surface, it often seems that time spent is much less expensive than money. If that last sentence made you uncomfortable, then you've probably already realized what I'm about to say. If not, then prepare to have your perspective altered. Because time isn't a tangible resource, many people make the mistake of not placing the appropriate amount of value on it. In reality, time is the only resource that no person currently living on this planet has the ability to create/procure more of. Ponder on that for a second (but not too long). If you spent 10 minutes watching cat videos on YouTube, that's 10 minutes you'll never get back, no matter how many videos on wealth creation you watch afterward.

I've found myself explaining this concept to more and more people lately as it seems like a really important concept to have a firm grasp upon. You have to know how to appropriately value your time because this will make it easy to roughly estimate whether something is worth doing or paying to have it done.

The way I generally approach it is with the "what's my time worth" method. It works like this:

Let's say my salary averages out to approximately $15/hr. and I need to wash my car. If I'm a professional car-washer, then I can probably wash it in 30 minutes, but if I'm not a professional it may take 2 hours (really, I've tried it). By that math, it costs a non-professional approximately $30 to wash their own car, not including the cost of purchasing car-washing tools and products. If a professional charges $15 to come to your place of business and wash your car for you, by paying them you essentially save $15 not including what you save on materials since they'll bring their own.

That's a really simple example (I know economists are probably shuddering) but I think it's comprehensive enough that you can start to put it into practice.

Once you get comfortable with calculating the value of your time, you eventually come to a realization; the more money you make, the more expensive your time becomes. When you reach this epiphany point, a lot of things start to make sense. That explains why many ultra-wealthy people have their own private jets. If I make $10,000/hr, it suddenly becomes RIDICULOUSLY expensive to arrive 2 hours early, take off shoes, go through airport security, endure delay-upon-delay, etc. When you make over 20mil/yr, you have to get better and more efficient at managing your time, otherwise you'll be essentially bleeding money. (This is one the primary reason I'm so impressed when a I encounter a wealthy person who isn't an impatient jerk)

And that brings me back to my airline predicament. I could spend a significant portion of my yearly salary simply chartering a private jet to whisk me away to and from my destination, but at the end of the day, the math simply doesn't add up for me. Many people are well aware of what better looks like, but the numbers may not always make better the wiser decision. At the end of the day, it's important to know how to stick to the numbers. Know the value of your time and you'll always be able to determine whether it makes sense to do something yourself or pay someone else; when it makes sense to take the seemingly frugal option, and when it's actually more frugal to yell "Shut Up and Take My Money!"