Thursday, March 5, 2015

The Time Value of Money, or The Value of Your Time: It Dunt Add Up!


I'm in a job search now. I've seen some good opportunities in NYC (I live in the Fairfield County suburbs), but I'm not sure the higher salary is such a good deal. So I decided to run the numbers, since I'm a bit OCD, and that's the kind of guy I am. Check it out:

1. Salary for a senior fundraising position in the city: $100,000

$100,000/12 months = $8,333

Let's assume you work an average of 180 hours/month (and I am low-balling this a bit):

Monthly gross of $8,333/180 = $46.30/hour

Let's assume, conservatively, 30% deductions from your gross (federal withholdings, retirement, Federal, New York, AND Connecticut income tax. Yes, you get it coming and going in this scenario).

Monthly net of $5,833/180 hours = $32.40/hour


2. Now we need to factor in direct commuting costs
Don't fret, time-cops, we'll get to commuting time shortly!
Metro North Rail pass, Fairfield station to GCT (that's Grand Central to those outside of the NYC orbit): $440/month
Let's assume I'm a tightwad, and I'll walk to Metro North station (that way I'll save 32 beans per month).
Now, you're not going to walk 20 blocks to the office from GCT, are you?
Monthly unlimited MTA transit pass: $110
Happy commuters

Now, let's add our direct commuting costs to this high-paying job:

$440 + $110 = $550/month

$5,833 net monthly - $550 = $5,283

$5,283/180 hours per month = $29.35/hour

How did that happen? That six-figure salary that I love to boast about has been knocked down to $63,400.

3. But wait! We forgot to include hours spent getting to and from work ... this will make a grown Wall Streeter cry.

I am making these figures up, on the conservative side. Your actual results may vary.
Here we go (times are all "each way"):


  1. Walking to the train station (1 mile): 20 minutes
  2. Waiting for the train to depart: 10 minutes
  3. Ride to GCT (assuming the train is running on time; MNR has a very bad track record in that arena): 1 hour, 15 minutes 
  4. Getting off the train, walking to subway stop and waiting for subway: 10 minutes
  5. Subway ride: 10 minutes
  6. Walk to the office: 5 minutes   ---- you made it!

Each day's commute time: four hours.

Now, 4 hours commute time
X 21 work days/month = 84.

180 hours worked + 84 hours commuting
Per month = 264 hours 

Drum roll .....

$5,283/month (net of direct commuting costs) / 264 hours (work + commute time)

= $20/hour, or $43,200/annum

What's the value of your time?

I think I'll just work from home ...

No comments:

Post a Comment