This is a question which always fascinated me. Just as a channel check and point of reference I am a retired electrical engineering type. While electronics put beanies and weenies on the table for my entire career it was also a hobby. My other hobbies are a love of the shooting sports and motorcycle riding. Oh great, an engineering type with a fetish for Harley Davidson motorcycles and guns.

Many of those who take the shooting sports seriously hand load their own ammunition. This may be for a number of reasons ranging from making the most accurate ammunition for a specific rifle to saving on the cost of ammunition. When figuring cost of hand loading ammunition we can figure the cost of brass, smokeless powder, the primer and the bullet. Essentially all of the components involved in making ammunition. There are people who actually try to make an argument for figuring in their time.

Now I retired during 2013 at age 63. While I was working my company billed out our engineering hours at about $200/hr. Sure wish I was paid that much. The point being that was a billing rate for engineering hours. That was all it was. I leave work and come home. I mow the lawn for two hours. Should I bill myself and if so how much? After mowing the lawn I visit my gun forums, electrical forums or even motorcycle forums, now what is my time worth? How about if I am sleeping? What is my time worth?

I just do not quite get or understand people trying to place a monetary value on their idle time. Leisure time is just that, leisure time. There is no way to place a value on time spent enjoying a hobby. It would be like adding a monetary value beyond component cost to a few hours of hand loading ammunition. I helped my neighbor upgrade to 200 Amp service. Never calculated my time or what my electrical skills were worth. My neighbor does snow removal, salting and plowing. I never have snow in my driveway. Life is good.

Ron

 

I think we should ask "Bill Gates" I suspect his answer would be "What ever the Market will bare"

kv

 

I look at it this way: If I can get paid $150 an hour to consult (I charge $150/hr), then spending 2 hours mowing the lawn doesn't make sense, especially if I can hire someone to mow for $60. But if there are no consulting jobs available, then also spending $60 to have someone to mow doesn't make sense, especially since I am fully capable of doing the work myself.

When doing the "cost analysis", you have to have take into account whether or not you can actually find a consulting job that will pay you your "rate".

Or, do what makes you happy and screw the "cost analysis". Do you do a cost analysis when you are on vacation?

 

If I had full employment for the prices things cost nowadays, I wouldn't be under a car today.
I could have paid $800 for a pair of new, coil-over shocks, installed. Instead, I paid $35 and spent a whole day replacing them.
Did I earn $ 765 for a day's work? I think I did.
Was anybody else going to pay me $75/hour?
Not this week.

Same for the differential last week. I could have paid $1500 for a new one, installed.
My nephew and I did the job for $240 in parts and 6 hours.
Did we earn $100/hour (each)?
I think so. I can tell because it's still in my pocket.
Was anybody else going to pay us $200/hour?
Not this week.

That's how I value the time I spend working on my own needs.
As for mowing the lawn? That's my best exercise. I couldn't pay anybody to exercise my heart if I wanted to.
That makes good health, "priceless".

 

I found that putting a price on my time was the only viable way to say no. As a consultant you never want to say no directly, but you can make the customer say no if you don't have the time or the inclination to solve his problem. These days I much prefer to study other enterprises and watch the money I salted away for forty years grow like a patch of weeds. It would take a reeeealy big offer for me to go back to work. Besides I figure I have a societal obligation to get out of the way and let some young turk take my place.

 

I for one don't place a value on my time. Never really have. Either the work is interesting enough to me to be worth doing regardless of pay or I simply say no.

I have never used price gouging to turn someones stupid project away. I just tell them it's dumb and I won't do it.

Same with doing my own projects. Either I see enough value in doing it to work on it or I don't and simply leave it be until it either becomes worth my time to do or it gets passed on to someone else who sees it as more of a priority to themselves than it was to myself.

 

I look at it this way: If I can get paid $150 an hour to consult (I charge $150/hr), then spending 2 hours mowing the lawn doesn't make sense, especially if I can hire someone to mow for $60. But if there are no consulting jobs available, then also spending $60 to have someone to mow doesn't make sense, especially since I am fully capable of doing the work myself.

When doing the "cost analysis", you have to have take into account whether or not you can actually find a consulting job that will pay you your "rate".

Or, do what makes you happy and screw the "cost analysis". Do you do a cost analysis when you are on vacation?

I like the analogy. I also confess that one day many years ago the lawn mower pissed me off. I have a contract every year now with a neighbor. Mower went on the tree lawn and I never looked back.

Ron

 

Interesting responses. Want to thank all who have shared their thoughts. Personally I never really did put a price on my time. When I retired I was offered and asked about consulting and I thanked the company but no thanks. I simply did not want to feel any obligation which I have since enjoyed.

Ron

 

My personal experiences have been that I only sought employment where I did not consider it work.
If it did become this, then I switched streams, I consider myself very lucky to be able to do this.
I remember years ago attending a seminar where a questionnaire was show that asked a number of people in all walks of life to name the most important aspects of their job.
The amount they were paid was Not near the top of the list.
Max.

 

My personal experiences have been that I only sought employment where I did not consider it work.
If it did become this, then I switched streams, I consider myself very lucky to be able to do this.
I remember years ago attending a seminar where a questionnaire was show that asked a number of people in all walks of life to name the most important aspects of their job.
The amount they were paid was Not near the top of the list.
Max.

Yep. Early in my working life I took the advice of some well seasoned mentors I had and put a lot of effort into setting my life up to run a different path than most everyone else.

The first 15 years or better I spent heavily investing into my own resources aiming for the future point where I wouldn't have to concern myself so much over what it costs me to live and work really made me question my motives but once I hit that point in my mid/late 30's where it was clear I didn't have to work for anyone anymore if I did not want to any more, it really made me feel different about things.

That was really tough for me to look at everyone else my age getting nice houses, driving nice vehicles and buying new toys while I lived hand to mouth with no money to spare for much of anything living out of a old worn out trailer house and driving old beaters while I gathered up and repaired every old piece of equipment or machine or tool I could find in hopes that someday I wouldn't have to work for anyone any more unless I wanted to.

But now I am 42 years old and have not had to work a job I didn't want to be in for at least 6 years. I have better reliable vehicles and the old house is mostly fixed up to the point it just looks old and rough on the outside (that will be fixed in a year or two) but its sound and cheap to live in.
More so is that over the last 3 - 4 years I have been putting my spare time and money into building a new house on a pay as I go plan because I did spend all that 'toy money' over the years on getting that equipment, machinery and resources that now allows me to do such projects on my own at my leisure and under my terms with relative ease and for next to nothing compared to what hiring it done costs.

But above all unlike the vast majority of my age equivalent people I am now not sitting under a mountain of debt with no hope to get out from it while being stuck in a job I hate because that's the only way I can keep my life going.

Sure the the place looks like a cross between a salvage yard and permanent construction site but at least it's my salvage yard/construction site that's bought and paid for.

 

... and the old house is mostly fixed up to the point it just looks old and rough (that will be fixed in a year or two) but its sound and cheap to live...

New tires on the trailer?

 

I just do not quite get or understand people trying to place a monetary value on their idle time. Leisure time is just that, leisure time.

Economists have studied this in great detail and the short version is, people tend to value their free time at roughly their salary rate. I'm not sure about retired people (like me). I enjoy not having to think that way anymore, so I'll often find myself doing things I can't really justify time-wise. But if someone wanted me to do a task I didn't want to do – work – it'd probably take something close to my former salary to get me to do it.

 

I consider it a mistake to value one's time at a constant rate. When I'm very busy with other projects, I normally charge more then than when I'm actually looking for work. That, for me, is the only way to more or less balance work load vs income.
But now I'm trying to figure out how to delegate mundane tasks, such as assembling components and driving around town buying stuff. And it's not easy to figure out when to delegate and when to do things yourself.... As my brother once remarked: "growth is painful"

 

Here is one way to calculate your hourly rate from the Small Business Administration.

Here is a video about the basic hourly rate ...

but ... your price is too high. or is it?

then there is markup and margins

 

My personal experiences have been that I only sought employment where I did not consider it work.

Interesting comment. The majority of my career we were employee owned which went well. A few years before I retired a major customer B&W (Babcock Wilcox) purchased us as part of their nuclear operations. Early on I enjoyed my work and going to work but after the sale I began to see the winds of change and actually was happy I got out when I did. Since retiring I have had no desire to work, even part time as I just enjoy my freedom.

Ron

 

Here is a video about the basic hourly rate ...

I use the old fashioned formula of,

Material cost + operating costs + 10% + personnel hourly rate. It's never let me down or left my customers feeling like they just got screwed yet.

 

New tires on the trailer?

New flooring, wiring, plumbing, central AC , insulation and windows in most of it plus the addition of a 12' x 20' entryway /workroom with combination laundry/2nd bathroom, new skirting, 8' x 20' deck and better furniture and appliances.

The plans for this summer are to replace the remaining 5 original windows plus getting the new siding on and maybe a new roof and ceiling insulation on next year.

All things I did and will do more of since I don't have to work a typical job for a living.

 

The plans for this summer are to replace the remaining 5 original windows plus getting the new siding on and maybe a new roof and ceiling insulation on next year.

Plan this summer to replace long gone old garage.

Ron

 

Plan this summer to replace long gone old garage.

Ron

Yea a guy has to have a garage if for nothing else to have a out of house work area to use.

Two summers ago I got a old ~1940's era 14' x 20' granary (built like a wood fortress out of oak, redwood and cedar!) for cheap and started remaking it into a nice year round workshed.

The first summer I had it I poured a concrete slab setup for floor heat then gutted the whole thing. After that it got remade with a nice upper level storage area plus redone to be well insulated and even air conditioned with a old 12K BTU window AC unit I got at an auction for $2 I remade into a wall mount unit!

Last summer I got the interior paneled and painted plus I built a mini oil burning boiler for it that heats it and the old house too so it's now comfortably year round usable.

It still needs the floor epoxy sealed and the workbenches plus storage cabinets built but at least it's a place I can work on small outdoor stuff in year round since my big shop isn't heated.

 

I have actually devoted a lot of thought to this in the past. Out of all that thought I didn't really come to the perfect answer, but I boiled it down to this:
Only count your time if it feels like work, and/or if there is some other money-making opportunity you could be pursuing right now.