One of the biggest lessons I learned from reading a bunch of stuff on entrepreneurialism was not how to make money – it was how to put a price tag to my time. Honestly, the first book I read that made me think about that was The Four Hour Workweek, but for one reason or the other, it didn’t click.
Where it did click, though, was from reading Part III of Todoodlist. Nick asked the question this way:
“If you had to put a monetary value on one hour of your life, what would it be?”
Something in his discussion made me realize how much of my time I was spending trying to save money – but had I reallocated that time to making money instead, I would have been better off.
Case in point: I bought and setup a home server last summer to cover a lot of the routine tasks that I had been doing to keep things backed up and synced up. All told, I probably spent 30 hours on this project, starting from the research portion of it. I still have to fiddle with it.
Of course, there were easier options available, but it would have cost me money to use those options. Between Backpack, Mozy, and MobileMe, I could have gotten the same functionality for what I actually use, but I’d be “stuck” with the monthly bills.
The problem is that the math doesn’t add up. Let’s assume for the sake of discussion that my time is worth $60 an hour. The server ended up costing me around $1500, and the time (if I took it seriously) ended up being worth $1800. So the total cost of me monkeying around with the server was $3,300. This does not include routine maintenance of the server.
However, had I just used Backpack, Mozy, and MobileMe, then, at most, I would have been looking at $40 a month. Setting up those systems would have taken at most 2 hours. So the total cost of going with the software-as-service model over three years would have been $1560. (I’m not willing to go much further than three years – there are too many variables at play.)
This is not so much about the technological suite I use to keep my stuff going as it is about the thought processes I used to make my decisions, and those processes didn’t really look at the value of my time.
What changed? I started using my creative time to make money and learned that it’s more effective to use your time to make money rather than trying to save money. (This presumes that you don’t have a spending problem.)
Creative Time is Different Than Other Types of Time
The life rate model Nick proposed in Todoodlist worked up to a certain point. But it broke down at the point in which it assumed time has a standard amount of value to it. The truth is different: some types of your time are more valuable than others.
What I’m focused on here is creative time, mostly because it’s the easiest to track. In any given week, there’s a certain amount of time in which you’re in your creative zone. If you’re honest with yourself, what you’ll probably find is that in that small amount of your time, you do the majority of the things that directly make you money.
For instance, if you’re a writer, I’ll bet that if you looked at the amount of words written in a week, the majority of those words are written during your flow states. The idea or outline for a painting may occur in an hour, and that hour can’t be replaced by any number of hours outside of the zone. Whatever your craft is, there are certain creative peaks in your time. And they tend to come pretty regularly.
Let’s take a step back for a second. If the meat of what you get paid to do happens in, say, 10 creative hours a week, shouldn’t that time be more valuable than other parts of your week – for example, those times in which you’re vegging on your couch not because you want to, but because you can’t do your other stuff? If you removed those hours on the couch, you would be okay. If you removed those creative hours, you’d be unable to do whatever it is that makes you money.
So, on the one hand, we know that our creative time is really valuable. On the other hand, we don’t act as if our creative time is that valuable. A lot of it has to do with us not seeing what we get out of that time.
Figuring Out How Much Your Creative Time is Worth
This will be the hardest part to explain because it depends on how you’re currently leveraging your creativity. I also don’t have this part worked out nearly as much as I’d like.
Let’s assume you spend 40 hours working on a project that yields you $1600. You’d think that your creative time is worth $40 per hour, but when you look at things, you notice that 10 hours of that time was spent in your creative zone – and in those periods, you actually did 80% of the creative work. The rest of the time was spent transitioning to or from one zone to the next or handling administrative overhead. Here’s how the math would work out:
The total yield for the project is $1600. The creative peak time spent on the project was 10 hours, and that accounted for 80% of the value of the project. So, 1600 X .8 = $1280; this is the amount of value you got out of your creative time. When you divide that by 10, you get $128.
If this is close to how you work, then your creative time is normally worth 3x your hourly rate. It’s hard for most of us to grasp it that way. A better way may be to consider how much longer it would take you to work on a creative project off-peak than on-peak.
(Oddly, Nick mentions in Todoodlist that his life rate is three times the amount he charges per hour for his business. It’s odd because my calculations are independent of his reasoning – I think – yet we converged on the same number.)
Regardless of whether you leverage your creativity for money directly as a freelancer, the reasoning stands. Every hour you dip into your creative time costs you three hours somewhere else.
Really Getting How Much Your Time is Worth
Let’s imagine that you have the option of going to a doctor at 10am – right during your creative peak – or 4pm – when you’re off-peak. Let’s also say it’ll cost $60 to visit the doctor and your creative time is worth $128. If you choose to go at 4pm, then the net value of the visit is $100. If you go in the morning, it’ll be $188.
If the doctor’s receptionist said that it’d cost you $88 extra to visit in the morning, I’m sure you’d choose to go in the afternoon. Left to our own devices, though, we’ll give up that $88 without thinking about it.
The point of all this is for you to value your creative time for the rare asset that it is. If at all possible, keep non-creative work out of your peak times.
If you can’t get non-creative work out of those peak times, is there a way you can outsource some of the work to other people to free up that time? If you can pay someone $6o an hour to free you up to make $128 an hour, you come out $68 ahead by doing so (assuming the same calculations as above).
You may also notice that I’m not talking about ways to increase your creative time – it can be done, but it’s more effective to use what you already have wisely before you try to create more to misuse. You’re also less likely to keep ratcheting up what you’re trying to do if you limit yourself to the time you already have.
So take the time to figure out when your creative peaks are, or, when they come unintentionally, to shift tasks to best harness your energy. Then protect those periods by keeping other things out of them if at all possible.
- Reflect on when your creative peaks are. Chart them on whatever planner you use.
- Where possible, reorganize your schedule to put the creative tasks in the creative periods and the non-creative tasks in other time blocks.
- In the future, make it a point to not commit yourself during creative times for tasks that don’t require the creative heavy lifting.
- Bonus points: Can you hire someone to do the things you’re spending your creative energy on for less the cost of your creative time? This is a win-win for you and the person being hired.
Amy Mommaerts says
I really like this way of looking at things! Nice post, thanks!
Amy Mommaertss last blog post..It’s Valentine’s Day…a bit of remembrance.
Mike Stankavich says
OK Charlie, you pegged me with this one. If I ever want to achieve my major objectives I need to quit sinking my best creative time and psychic energy into ego stroking personal IT projects like yes, backup servers (I suspect I have far more than 30 hours into my oh-so-cool OpenFiler box with the Atom board and removable SATA bay) that really don’t have enough ROI to cover the time investment. Nothing wrong with having a hobby, but it needs to stay out of creative time.
I have a pretty clear notion of my hourly time value, but I never considered weighting it by output effectivity. I’ll definitely take that into account as I refine my daily routine.
Mike Stankavichs last blog post..My Toronto Thanksgiving
Joely Black says
Excellent, and very insightful post. I’m thinking about it from the perspective of never having been paid for my core creativity (Amnar; writing). It’s like a big old *thwack* from the universe again!
Joely Blacks last blog post..And now, I’m off in my little boat by myself
Very useful way of thinking about things. I think the key is to realize that not all of our time is equally valuable. This fits really well with your heat-mapping ideas. Not that I’m the kind of person that ever takes the step of writing down in detail the chunks of time but I do have a reasonable intuitive sense of when I work best…
JoVEs last blog post..Play review: Belle Moral
Very interesting post related to heatmapping.
Christine Martell says
This makes something I have been feeling concrete. Another big time suck for me is agreeing to drive into the city for meetings that require me to drive in peak traffic. No more! And no more giving my peak creative times to people for coffee.
Christine Martells last blog post..My business has cracked!
Wow. I don’t think I would have ever come up with this line of thought if left to my own devices. I am going to make an effort to really “keep non-creative work out of your peak times”. Sometimes I feel overwhelmed with all the over-head tasks involved in projects, but keeping them out of my mind while I’m in the zone will pay off in the long run. It might be a good idea to use a time tracking software and track the over head activities separate from the creative/productive activities, too.
Does anyone have any advice for getting into that creative zone? For turning on the switch some how? Any resources (sites, blog posts, etc.) for that would be helpful!
Finola Prescott says
Interesting slant that makes a lot of sense – for me the more difficult thing would be to pin down when I am most creative and productive in my income earning work – and then standing firm to not agreeing to disturbances in those times.
I think also that you must agree to let yourself rest at those times when your body and mind really demand it – I often push myself to work through these times – to meet that deadline – only to find I have substandard work from that period and then have to deal with being vexed with myself for not resting when I really needed to, on top of usually wreaking my next day’s creative time by being exhausted and frustrated! Not a profitable way to work is it!?!
Finola Prescotts last blog post..Work Overload – Corporate Gifts Island Style
Okay, I really am convinced now. I have to start getting honest about when I’m truly productive. Generally I hate systems so I’ve never been one to actually sit down and work out the way my creative energy changes throughout the day. I know roughly when I am peaking: mid – late afternoon and late at night, but that’s a gut guess from years of working. I can’t chart this more definitively. But I know I’m not optimizing my time now between my creative tasks, family commitments, work, household chores and errands, so I think it’s about time I figured out how all the different parts of my life should be slotted in. I am lucky enough to have the flexibility to structure most of my week to suit myself, but the down side of that is my lack of discipline and structure can leave me unfocused. When this happens I get frustrated and upset with myself for not getting more of the things done that are important to me. This is the big cost of my lack of organization – the guilt I heap upon myself. It doesn’t help the situation and it certainly won’t help me achieve more out of my creativity.
I’m going to start charting my day tomorrow. Next week I’ll report back with what discovered. That’s a promise.
As promised, I monitored my optimum creative periods when it was easy to work and lots got done. My times so far are:
7.30-10am, as long as I don’t work out first. I don’t know why, but if I work out then I lose focus and fiddle faddle around when I try to write.
Only problem with these times are they don’t work so well for my family commitments. Mornings I have to feed my son and get him off to pre-school 3 days a week. Late afternoon I need to pick him up and get him dinner. And staying up to midnight too many nights leaves me underslept and cranky.
So, where does that leave me?
@Amy: Thanks for the feedback – you’re welcome!
@Mike: Looking at my time that way made it very hard for me to do the GTD thing. Is “creative time” a context? What if the creative thing isn’t a next action? GTD stuff fell away in many ways to a more intuitive productivity system with less structure (but that incorporated a lot of GTD principles.) Let me know how this works for you.
@Joely: Thanks – is that good “thwack” or a bad thwack?
@JoVE: The heatmapping ideas are just the measure of your intuitive gauge; some people find them useful, others don’t. I’m glad you commented on the connection.
@Christine: Take back your creative time, or others will continue to take it from you. I’m glad this helped put the finger on things for you.
@Gabe: I’ll have something coming up for your questions next week. The heatmapping posts had some tips for setting yourself up for those zones, but not upshifting them in the moment. That’s the harder task.
@Finola: It’s easier to pin down those times than you may think – use the Productivity Heatmap, or just chart your days using the same 0-5 scale by the hour. Do it for three or four days and you’ll have a pretty good picture.
And I really agree with the resting bit. You can overwork the horse, y’know?
@Kelly: Finally! After a year of working on you! 🙂
You’ve got a hard task here, because harnessing your creative times and exercising are both important in different ways. Is there a way you can work out after 10 but before lunch? Can you grab a nap from 12:30-3pm so you’re getting enough sleep, even if you stay up?
I’ll email you next week to discuss this a bit. I find it interesting that you found a peak in the morning that you didn’t originally report.
pete samuels says
I’m a designer and my time is more valuable than lots of things – one thing i hate is paying bills, there’s some sites out there like http://www.billstrust.com that are filling gaps in peoples lives slowly chipping away at time wasting peeves that we now take for granted (washing clothes used to take a day).
Elizabeth Potts Weinstein says
omg this is the exact thing I’ve been thinking about this week. how my peak creative time (early AM) is where all the magic happens, and really if I have 3 hours of that a day, that’s where I make all my money. etc. (I’m deciding now re childcare/household help, outsourcing, etc.)
Jackie Lee says
What an amazing post this is. I’m still struggling with identifying what my time is worth, but I do know that my creative time is worth a lot more than I give it credit for.
My creative time is in the morning, I do have family commitments during those time ~ and a few other things that could probably be rearranged.
It is surprising to me though, those 3 or 4 hours in the morning when I think about it are really when the work that makes money gets done.
Thanks for getting me thinking about this Charlie!