Myspace Migration: Your Hourly Rate

I woke up at just before 5am this morning thanks to a fantastic clap of thunder. Purportedly, we will have large hail today - that is, if you believe the Texas weatherpeople and that, in itself, is something of a large gamble. All I can say is that I hope I don't have to pay another $250 deductible to fix hail damage on my car if it DOES choose to hail while I'm at the office (because at home? it's in the garage, baby!).

Anyway, I was reading a blog this morning about how this one chick justifies sending out her laundry rather than doing it and other assorted chores she doesn't want to do. Her justification is the "hourly rate" theory. Under this theory, you look at the following formula:

($ you earn/yr) / ((hrs worked/week) x (no. weeks worked/yr)) = your hourly rate

The thought is you take that rate and use it as the benchmark against things you're looking at spending your time on. Such as, "I'm going to clean my house today; that will take 4 hours. At my hourly rate of "X," it would cost me "Y" worth of my time to clean it. However, if I hire someone, it will be $100 for them to come in and do it, thus I'm actually saving "Z," because it's so much less than what my time is worth.

Ha, haha, hahahaha.... Riiiiight.

Here's my issue with that: this only works if you get paid by the hour or there is some way to ensure you are actually making your "hourly rate" while you're "saving money." Otherwise, you're not saving money - you're still spending it. Sure, it allows you to do fun and fabulous things that you can't do while you're earning your hourly rate...and that sometimes can be worth it. Just don't fool yourself into believing an overinflated hourly rate to allow you to escape from all the "grown-up" responsibilities that we can pay someone else to do. That's why we have kids - child labor is SO much less expensive and we can safely delude ourselves into believe that we're not being lazy, we're teaching them responsibility.

Anyway, if you ARE going to go with this theory of the "hourly rate," here's the correct formula for those who have an annual salary and aren't paid by the hour/paid by project and have an endless supply of work (read: 24/7 earning potential):

($ you earn/yr) / 8760 = Your TRUE hourly "living rate"

Now, using THAT number... are you really saving money by having someone else clean your house or by sending out your laundry?

(ok, so this picture isn't COMPLETELY appropriate, but it's funny and those are people for whom I could see the original formula being applicable - they probably COULD be earning their "hourly rate" while someone was cleaning their house!!)