Monday, October 22, 2007

If You Could Make an Extra $10K...

Let's say someone gave you an offer: you could work 10 extra hours a week and make and extra $10,000 a year. Would you do it? How about $15,000? Or $20,000? How much is your free time worth? Patrick of Cash, Money, Life and his wife had to answer just such a question.

I make a good living and I work pretty long hours. My remaining hours of free time are worth a lot to me. I would not give them up easily, but at a certain price, I probably would. Like every other resource, money has a declining utility curve: there is a certain minimum that is absolutely necessary, more is really nice, but beyond a certain amount money really becomes much less important.

For example, do you think that Warren Buffet, Bill Gates or Richard Branson would work an extra 10 hours a week for an extra million dollars in annual income? Well, maybe they would because they enjoy their work, but I am guessing that they wouldn't do it for the money.

I am not quite at the stage where I would be able to turn down a million dollars a year (or $50,000 for that matter), but if someone offered me a job that involved a mild increase in pay in exchange for a longer work week, I would probably say "no". That was not always the case. Earlier in my career, back when I was single and without kids, my career would have come first. My career is still very important to me, and I sacrifice a lot to keep it on track, however it is now far from being the most important thing in my life.

On the same topic, Moolanomy offers this story. I doubt if it's true, but it drives home the point.


rico said...

Yes life is a matter of balance.

plonkee said...

I sold a week of leave for £500 (give or take) this year. To be fair, for various reasons I still had 5 weeks left, but I guess I can be bought quite cheaply.

Shadox said...

Plonkee - you are for sale cheap. Dude! How much do you charge for a day and a half... :-)

Patrick said...

Hi Shadox,

Thanks for the mention. Our situation did come down to a little more than just number of hours worked - there was the whole "working on weekends, holidays, nights, days, and military issue." But, when it came down to it, we realized we would be happier by having a better work schedule and less pay. It was well worth the sacrifice. :)

On a side note, when I separated form the military, I sold almost 2 months worth of leave. Military members accrue 30 days of leave each year, and have holidays off. I was able to save a lot of leave over the years. Now, I wouldn't sell my leave (vacation) unless I had to.