Inspired by a trailer from Mr. Sexyback himself, I got to thinking about the cost of free time. “Four minutes for a cup of coffee?” JT laments as he peers at the menu in a world where time is also its currency. It strikes me that very few people actually factor the time it takes to buy a cup of coffee into the total cost. We bitch and moan at the $4 artisanal drip coffee (I recently realized this is a fitting term, since many baristas are likely art students), but rarely about the $15 in time wasted while standing in line.
For instance, last night I wanted a cheap snack after the gym, so I walked over to McDonalds and spent 15 minutes ordering $2 worth of McDoubles. Yes, I spent 15 minutes eating nutritionally bankrupt food that costs only $2. So was it worth it?
Edmond Lau, Quora engineer and overall smarty pants, breaks it down like this:
Assuming a typical person sleeps 8 hours a day and spends an hour a day on basic needs like showering, using the toilet, etc., he’s left with 105 hours per week. If he’s working 60 hour-weeks with a $100K annual salary, his break-even spending rate is $47/hour pre-tax and $28/hour post-tax. [Assuming a 40% tax rate and no implied savings]
In other words, that 15 minutes cost me $7 ($28/hr * 15mins/60mins). Total meal cost, twilight-years-healthcare costs aside, is actually $9.
But, of course, there are other concerns. Thankfully, Venkatesh Rao, the brilliant and cheeky author of Ribbon Farm and the Be Slightly Evil newsletter (personal favorite), brings the underlying narrative and personal goals to bear:
For many serious coffee geeks, their morning, meditative 15 minute ritual of grinding fresh beans, making their cup etc. is what makes their entire life possible. Would you do a simple comparative advantage analysis and conclude they should hire an intern to make the coffee?
You are basically conflating subjective utility with objective “money.” The former is different, and is derived from a life-narrative that provides the context for decisions.
This type of limited analysis also leads to weird conclusions like “If Bill Gates spotted $100 lying on the street, it wouldn’t be worth his time to bend down to pick it up.”
I think that is just plain silly. Gates should, and probably would, pick it up, even if only to give it to the next homeless person he meets. He didn’t get where he has without having a certain respect for money built into his life-narrative.
Indeed, there are intangibles that we beg to be accounted for. It’s why I prefer writing in a chair in our lobby to typing at my desk. Is it worth the five-minute ($2.30) setup cost? Not from an economic standpoint. But when you factor in the increased productivity of comfort and focus, which can admittedly be made very tangible if desired, the equation becomes more complex. Infinitely so if we account for other situational factors like sleep, coffee, shoes on or off, etc.
But this comparison lies at the very heart of why we’re often more happy with less-researched purchases. The weight of research, both in time and cognitive effort, have high costs that we attribute to our expectations of the purchase. And when our Bass Weejuns turn out to be coated in polyurethane, it shatters those of us who performed deep-dive research on which brand is best. (Pull the damn trigger, sissy!)
So what’s the moral? Think about your time critically. Calculate the cost of your time when alternatives are essentially equal.
e.g. You can take a $2 bus for 45mins or a $15 taxi for 15mins. Both get you to your location, assuming you can allot enough time for both.
Cab = $22 ($15 cash + $7 time); Bus = $23 ($2 cash + $21 time);
The taxi’s privacy is a tradeoff for reading your latest book on the bus. (Nothing is ever 100% equal, but try to be rational. Pretty please?)
Lastly, don’t forget cash. We don’t all make $100k/yr, so cash can be very important. Most small businesses fail because they are undercapitalized. Most people end up in debt for the same reason. Time, while it has a cost, is not a cash cost. Monetizing time is merely an economic utility to help you weigh alternatives, but not an end in and of itself. Your family, girlfriend and even the sweet little pooch that cheerfully pees on your rug, should not regularly (if at all) be subjected to this test. (Though the dog begs some interesting comparisons.) There’s a fine line between frugality and dickish behavior. Choose wisely.