eFax of Life from CBMC Heartland

What's your time worth?

It was the biggest real estate deal I'd done. Borrowed just under $200,000 to buy a piece of raw commercial/development land - and less then two weeks after I'd completed the purchase - the company that had previously committed to take 60% of the land - backed out. Like the farmer still sitting on the milking stool after the tornado took the cow... I was left 'holding the bag.'

O.K. - I've had problems before. This is what separates the men from the boys. The bigger the risk - the bigger the reward. (Yeah - I sometimes live by clichés!)
So, I'm working on this and several other 'opportunities' when I get a call from my friendly banker. "Ken, I'd like to visit with you in my office. What time can you be here this afternoon?"

I've been summoned to a 'butt-chewing' before and this sure has all the signs that another one is coming. So, that afternoon I'm in his office and he opens up with a question: "Ken, do you know how much the interest is per year on your note?"

"No. I have a rough idea - but not the exact number."

"Ken, your interest per year is $XX,000." He pauses - then goes on, "Do you know what your interest is per month?"

This sounds like a game. I'm intrigued. "No Chet, what is my interest per month?"

"Ken, your interest per month is $XX,000." And looking down at his calculator - he continues, "Ken, do you know what your interest per day is?"

"No Chet, but I'll bet you do." And I was right. He did. But I wasn't there for a lesson on compound interest. He had another point.

"Ken, your interest bill is so high that you can't afford to sit here and talk to me. I just want you to know that if you can't pay the note off at the end of the year - we are going to take the land plus the other property you pledged as collateral."

Now - flash forward to last week. I met with my board and gave them my per year/per day/per hour costs.
Why? Because God's standard for every one is that we have a heart (of love, ministry, faith) and a head (of order, balance, integrity).

I'm convinced if I focus on numbers - instead of the Lord - I will use and manipulate people. I'm also convinced if I forget numbers - I will operate in a way that brings discredit on the Lord and pain to me.

How? To keep balance in my life - I want to 'work' about 2,000 hours (40 hours per week X 50 weeks) per year - so I take my total costs (which include salary, benefits, meals, mileage, my share of rent, secretarial support, printing, postage, capital expense items, etc.) and divide that by my 2,000 hours. That is my per hour cost. Times 8 is my per day cost. (If you want to know the exact numbers - I'll tell you. See or call me. If I'm not in - leave a voice message.)

These numbers remind me to allocate my time wisely. When I'm tempted to take on another 'project' - my 'operating cost' is one of the factors I must consider. It can't be the only factor. It can't be the primary factor. But it also can't be the 'forgotten factor.'

Incidentally, this is a handy tool when helping someone evaluate a job opportunity. If they have a $15/hour offer - just multiply that per hour wage times the 2,000 work hours in a year and ask them if they are prepared to live off $30,000 per year. Also, when I know my per hour cost - then I can better judge if I should hire certain work done - or do it myself. Often I can hire a professional carpenter, plumber, carpet cleaner, lawn care service for less than my own 'billable' rate. If I have the time and enjoy doing certain tasks myself - I may not hire the work done. But, by knowing my own rate - I can make better decisions. So:

  1. How many hours do you really work per year?
  2. What are your gross expenses per year?
  3. What is your hourly/daily rate?

Knowing these numbers helps us make better choices.

CBMC Heartland, 06/06/02

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