Time Really is Money

 

I'm writing to you this week from India. My first trip to this large, diverse country.  It's fascinating to see this economy come alive.  Fascinating to see the stark differences in how consumer business is transacted.  The explosion of commerce and western influence has had quite an impact over the past 10 years.  Because this trip is mostly about vacation and not business my observations are more consumer based, but I'm told by my friends who are from here and still transact business here that my observations apply to the business world as well.

 

Nothing really prepared me for the number of people here.  The density is intense and I keep thinking about the available human capacity as this giant country continues to grow and prosper.  As efficiencies improve through solid, repeatable processes combined with the intense drive from these people to excel, it's clear that great things will come out of this land of 1.2 billion.  India's two most populated cities, Mumbai and New Delhi have 20 million and 17 million people respectively! And while the country has a long way to go in educating this populace, it's already making great strides.

 

This is a country that places high value on learning mathematics, so I started thinking about equations of time and people and money.  I ran across an article by a British university professor who developed a formula to prove the old adage "time is money". 

 

V=(W((100-t)/100))/C

• V  = value of an hour
• W = person's hourly wage
• t = tax rate
• C = local cost of living

So without going through the details of the formula, let's accept by example that brushing your teeth for three minutes costs forty-five cents and washing your car by hand costs $4.50.  These two activities actually have very different "returns on investment." At only forty-five cents a brushing 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.

 

So valuing time is vitally important.  We all know that.  But are we willing to consider it frequently enough to make a difference? To do so takes discipline.  Self-discipline.  I have a feeling most of you do this fairly well.  I'm thinking that here in India this formula isn't applied often because the cost of labor has been so "cheap".  But it's changing here.  Demand is growing so fast that inflation and wage increases are strong. I hope if you're not in the habit of regularly measuring what your time is worth and changing your behaviors based on the results, you'll consider it.  I know based on my experience here I'm going to monitor it more.

 

Come join our discussion on our blog or I welcome your feedback through email.  

 

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