Give yourself a Raise… Work less…
Return On Time. Return On Time, or ROT for short, is something I use in my daily life, and after you have read this article, I hope you will too. Return on Time is an important aspect of being able to work less, make more money, and get your life the exact way you want it.
Knowing your Return on Time, means knowing exactly how much you are making for every minute of actual work you are putting into a project or task. Let’s say you have a job where you make $50 an hour and you are working 8 hours a day, which means you earn $400 a day. On the other hand, you need to take into consideration, that it may take you two hours every day to drive to work and back, translating that you are in actual fact putting in 10 hours every day instead of only 8 hours, which means your true Return On Time is $40 an hour for doing the very same job, instead of $50 an hour.
It is of immense importance to measure one’s Return On Time, especially if you are a business owner or entrepreneur. Unfortunately, most business owners & entrepreneurs don’t necessarily think about their Return On Time. All too often most entrepreneurs make less than the minimal wage, in addition to working anything from 60-100 hours a week working on projects and other business related activities. If you are a business owner, and you are not thinking of your Return On Time, I would suggest that you start doing so. Even if you enjoy your work, it still sucks to put that many hours into the business! No matter what they say, nobody really wants to work a 100 hours a week on something, even if they enjoy their work. If you are working 100 hours a week and saying “oh I love it!” get real, you are just avoiding whatever unresolved childhood issues you may have.
To calculate your true Return On Time, you need to start by answering a couple of questions, getting some clarity on certain aspects. Here is how you can calculate your true Return On Time:
Firstly, you need to establish what your income consist of.
What is your gross income? It is important to know your throughput, and your “accountable income”. Next you need to check what your Net Income consists of, what are taking out on Paper? Then of course you need to check your Net Adjusted Income. For example, how much money do you take out of the business to pay your house, insurance, and other necessities? You need to take a look at these expenses and work it into the calculation. In addition, what are your hidden expenses, such as the car you use to get to work with? Or the clothes you need to buy to maintain your job. This is the real gem you are looking for, what does your time really produce? More importantly, what are you making every minute you work?
Secondly, you need to work out how much time are you putting into your business or career.
How much time do work each week? Work it out either over week, month, or a year. I would suggest monthly analysis, but over the last 12 months rolling. Here is an easy guide to work it out:
Yearly: There is 52 weeks in a year, so you take 52 weeks x 40 hours, which equals 2080 hours a year, or 124 800 minutes a year.
Monthly: There is an average of 4.33 weeks in a month, therefore 4.33 x 40 hours, equaling 173 hours a month, or 10 380 minutes a month.
If you can’t figure out how many hours are in your week after adding them up, you should consider reading the rest of the article, and rather buy the book Math for Dummies.
Your Return On Time calculation will look something like this:
1) (Income) / (Monthly Hours) = Your Return On Time by Hour.
2) [ (Income) / (Monthly Hours) ] / (60 Minutes) = Your Return On Time by Minute.
Here are a couple of examples, in order to help you understand my Return On Time theory in full color and vivid details:
EXAMPLE #1 – 40 Hour Week
($350 000 Gross Income) / 2080 Hours a Year = $168 an Hour and $2.80 a Minute that you are working.
EXAMPLE #2 – 20 Hour Week
($350 000 Gross Income) / 2080 Hours a Year = $336 an Hour and $5.60 a Minute that you are working.
EXAMPLE #3 – 10 Hour Week
($350 000 Gross Income) / 2080 Hours a Year = $672 an Hour and $11.20 a Minute that you are working.
As you can see, the less you work, the more you make… In fact, if you work 10 hours instead of 40 hours a week, then it gives the effect of giving yourself a 400% raise… Isn’t it time that you gave yourself a raise and worked less?
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By Ross, March 16, 2010 @ 5:33 pm
Great way to spell it all out. It’s good to do the math. I suspect there are a lot of business owners out there working for below minimum wage and they don’t even know it.
By Tyler Tichelaar, April 2, 2010 @ 5:35 am
Great post, Chris. This topic is one I struggle with daily. It’s always good to determine how many hours you really spend on a project, including travel time. All those minutes add up quickly. Looking forward to your book and more great advice.