Home > Cutting Spending, The Master Plan > Is my leisure time worth $40/hr?

Is my leisure time worth $40/hr?

In 2011 my net worth was increasing at about $600/mo like clockwork.  I had a good job, and I was spending most of what I made, and saving just a little each month.  See my cash analysis for more details.

Since January 2012, I began learning more about my cash, I started spending, saving it, and investing it more wisely.  At the end of 2012, I now have $14,400 more than I would have otherwise.  Thus the time I spent learning about my cash was worth at least $40/hr.

The Details

I started reading everything about personal finance I could get my hands on.  And throughout the year, I made a number of changes to how I make, spend, keep, and invest my money.

This post is about the results, not the specific changes I made.  There is a whole community of supportive personal finance bloggers who helped me figure out the basics.  By reading a variety of authors, I heard a number of different perspectives on the main issues pertaining to my cash.

The different ideas available around the web are a great starting point.  Bloggers seem to be able to explain complex topics way better than the books I’ve read since.  They gave me a great starting point to select more comprehensive books on the topics that interested me.

I spent about an hour a day, everyday, reading either blogs or books and I truly enjoyed expanding my knowledge base. I like spending my leisure time reading, so it never really seemed like to work to me. It was just relaxing in bed with a book, or reading a blog  on the train to work.

I never expected that the time I spent reading would be profitable.  It turns out, it was some of the most profitable time I’ve ever spent.

The Results

Throughout 2012, I’ve been able to increase my net worth by $1,800/mo.  I now have ($1,800 -$600)*12 = $14,400 more than I would have had if I didn’t make any financial changes.  My net worth increased by $1,800*12  = $21,600, but $14,400 of that is a result of my new knowledge.

When I look at the numbers, it’s tough for me to justify any other conclusion.  So let’s assume I spent 365 hrs reading about and tweaking my finances.  That means that for every hour I spent reading, I increased my net worth by $14,400/365 = $40.

I realize how ridiculous this sounds.  It would be one thing if each hour of reading yielded $40.  That’s not what I’m saying.  I’m saying that when I read books about money, I essentially grow my salary by $40/hr.  I mean, it’s not like I’m going to forget the stuff I learned once 2013 starts.

The Future

So what does this mean about 2013?  Is there anyway I can continue to grow my net worth faster every time I read?  It worked so well in 2012 because most of the changes I made had to do with saving money.  If your baseline is to waste a ton of money every month, it’s actually pretty easy to start saving and increase your rate of net worth growth.

But what happens once you’ve cut all that you can out of your budget? (not that I have, I’ve got a long way to go)  But once I start trying to increase the returns from my investments, or earning money on the side, there’s no way I’ll be able to yield a $40 increase in my salary for ever hour I put in… right?

This is all very confusing.  Should I make my 2013 goal to increase my net worth by $1,800/mo, or by $3,000/mo.  The former seems like the status quo, and the later seems ridiculous.  This whole goal setting process might be tough this year.  Should I set a goal before I have any idea how I might reach it?

  1. Canadian Performer's Money
    December 9, 2012 at 4:45 PM

    Great that you managed to grow your net worth so much. Those are big numbers.

    I would be careful about setting large specific dollar amount goals going forward. You may feel like a failure if you don’t reach them. Sounds like most of your wasteful spending has been curbed already.

    Maybe a goal like “invest 20% of my net income” would be more realistic than an ever increasing dollar amount each year.

    • December 9, 2012 at 6:06 PM

      Yea, you make a good point. It would be difficult to trim that much more fat from my budget in 2013, so a “% of income” goal does probably make more sense. Although I’m a big fan of overly ambitious goals. Would men have walked on the moon in 1969 had Kennedy not set his ambitious goal in 1961?
      I’ve been kicking around a few money making ideas, so you never know… I’ll publish my 2013 goals later this month.

      • Canadian Performer's Money
        December 9, 2012 at 10:25 PM

        Go for it! Best of luck in 2013.

  1. December 19, 2012 at 4:27 AM

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