The Value of Time
A British university professor has proved the old adage “time is money” in a 2002 article by CNN by creating the following mathematical formula:
- V = value of an hour
- W = person’s hourly wage
- t = tax rate
- C = local cost of living
Ian Walker, economic professor of central England’s Warwick University, calculated this formula to show people that time actually IS money. This formula shows that day-to-day activities can be calculated monetarily to help you understand the value and costs of time. Consider the following.
- Brushing your teeth for three minutes = costs 45 cents
- Washing your car by hand = costs $4.50
- Cooking dinner including the value of time spent and the value of the ingredients = costs $15.72 for men and $14.30 for women
Given that it only costs 45 cents, brushing your teeth for three minutes and doing it after every meal is more cost effective than going to the dentist to pay for procedures as a result of poor oral hygiene. On the other hand, washing your car by hand can be a waste of time if you have the option of taking your vehicle through an automatic carwash that costs less than $4.50.
What does this mean for appraisers? Walker explains, “What this helps us understand is that as the value of our time rises, we are likely to buy more of it, which explains why people are paying to save time, like having someone to cut the lawn or clean the house.”
Many appraisers constantly juggle their duties and responsibilities on a daily basis. I think it is safe to say that most appraisers “wear many hats”, especially appraisal businesses that run a one-person operation. Running an appraisal business is not just about providing quality and accurate appraisals, though that’s obviously an important aspect of your profession. An appraiser is also a sales and marketing genius – effectively networking and increasing business. An appraiser is an accounting and financial expert – managing the company’s billing, collections, and budgets. And finally, an appraiser is a person – chances are you have a family you want to spend time with and a life that you would love to enjoy and experience.
That is, if you had the time or can “afford it”, right?
The Challenge: Finding A Balance
As Walker shared, time really IS money. I am sure I am not the only one that desires more time in a day. It would be nice to know exactly and, as he says, “decide whether it is worth spending extra cash to save time.” I often hear comments from prospective clients that it would be great to use our factoring services so they can eliminate the aspect of time-consuming billing and frustrating collections from their business processes and have more time – more time to complete more appraisal orders, more time to focus on sales and marketing, more time to sleep (one appraiser told me she only got 4 hours of sleep a night), or simply more time to enjoy life! But face it time itself will never change.
This is our challenge in our professions and many times in our lives – finding the right balance. So ask yourself this: “What aspect of my appraisal business can I let go?” In other words and as Walker explained, what are you willing to pay for to save time?
Time is money. How do you want to spend it?