called opportunity cost,in economic terms). In
other words, know what your time is worth. If
this is your first year, it’s rather hard to know
what your time is worth because you don’t have
an annual income number to punch into the
equation. You can use your income goal for your
first year. Be realistic. Divide the yearly income
by twelve months, then divide that by thirty days,
divide that by the number of hours you work per
day and you’ll figure out what you’re worth per
hour.
Let’s do an example. Say your income goal for
the year is to make $100,000 (after reading this
book, of course).
- Divide $100,000 by 50 weeks (allowing 2
weeks for vacation). - Divide $2,000 by 42 hours (5 days @ 8^1 ⁄ 2 hrs).
- Your time is worth $47 per hour.
This hourly amount will help you decide
whether something is worth your time or whether
you can put that time to better use based on the
money that you’re worth per hour.
Let me give you a real-life example. If your
time is worth $47 per hour, it wouldn’t make
much sense washing and ironing your dress
clothes yourself, would it? Take them to the clean-
ers, save yourself two hours of work, and pay, say,
only about $30 for that same work. By doing that
you essentially just made yourself $64 by having
The Real Estate Agent’s Guide to FSBOs