the true cost of commuting
July 23, 2008 by Cash
As most of our ever savvy UM readers may have guessed, right now I’ve got an ahem, “unexpectedly open schedule”. As I spend time working to fill it once again, I’ve been pondering the true value of my time.
Leaving behind a 3 hour daily commute is something I’ve been dying to do for ages. Leaving behind the paycheck.. well, not so much (er, duh).
Still, regaining 60 hours (if I’m blessed with a downtown job I can walk to, or even a telecommute situation) of my life every month has its own mental rewards, but what about the financial aspect?
UM favorite Tim Ferriss touches on this subject often (in 4HWW, and elsewhere), but I’ll give just one thought provoking calculation for you.
Let’s say you earn $75,000 a year.
The ‘accepted’ amount of hours per year is 2080.
The hourly rate in this example then would be calculated like so:
75000/2080
=$36/hour (rounded)
So in this example if a person earning $75,000 / year was able to save 3 hours a day, 5 times a week, 4 times a month:
$36/hour x 3 hours/day x 5 times/week x 4 times a month =
$2160/month
Over the course of a year?
$25,920
Granted, this isn’t money back in your pocket if you choose to squander the time.
If you spend even a fraction of those hours working on automated income streams, or practicing a hobby that could someday produce an income (in my case, the ongoing cycle of grueling frustration / orgasmic reward that is learning to DJ), those hours can prove quite lucrative indeed.
For me specifically? I’ve reanalyzed my ‘acceptable’ hourly rate to consider the benefits of taking back so much of my life.
I know I’m good for it.
I know someone with a Kitchen Aide Mixer… It’s real nice.
I just might be worse at maths than I thought, but when I use my calculator, and divide 75000 by 2080, I get $36+ per hour. Am I doing something wrong?
Not that I meant to disregard your point here, I do see what you mean. You could be right, but then I don’t have as long a commute as you did…unless I miss a connecting bus. And, I would LOVE a job where I could telecommute, for sure.
Caroline - thanks for the correction, fixed.
Sometimes these 3:14 am strokes of brilliance come at the cost of correctness.
Leave it to our readers to keep us honest
I’m glad I only have a 20 minute subway ride. But my rent is insane!
It’s always a trade off for me. Given that I do contract and consulting work, I have to be flexible about my locations. If I endure a commute for 3 hours a day 8 months a year, I can take the other 4 months off. Which to me, is worth it.