#14 How Much Is Your Time Worth?

Welcome to the Passive Income MD podcast where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now let's get on with the show. Well, hello everyone, it's Peter Passive Income md. I hope you're having a great week in spite of all the challenges. Hope your family's staying safe and healthy. I know that a lot of things must be on your mind right now, as is on mine. And one of the things that I've really been thinking about this week is my time, how I spend it, how much is it worth, how I should be using it. And I wonder if you've been thinking the same thing. I mean, this is an interesting time, especially in medicine, where most of us thought that our medical incomes were bulletproof. We have always been told that it's, you know, healthcare is a necessity, at least in terms of a business. So we are probably the most recession proof, if not one of the most recession proof businesses out there. But I think a lot of us have discovered that this is not necessarily the case. Now, I don't know how many of you out there, like me, have been told recently that you're going to get paid less for the time you put in. And what that means is that the amount you may be putting in the same amount of time, but essentially what comes out in terms of income is less. I know there are many physicians that are in that situation. Whether reimbursements are down, whether your hospital decided to cut your hourly wage or your salary, whether they've told you that you're going to be working less in the hospital and all these sorts of things, or were they regardless, you've been told that your time is likely worth less than it was a couple months ago. Now, that's kind of a crazy thing because as you know, and I've said it before, and it's a very cliche thing, time is your most valuable resource or asset. Now, when your time is devalued, that's a crushing thing. Well, to me that's crushing because I've always tried to extract the most value, at least financially, in terms of spiritually and financially fulfillment wise, as much as possible. So it hurts to be told that you're going to get paid less for your time. As many of you know, when you lose money, you know you can get that back. You can put in time and get money back, you can put in energy, you can put effort and get that money back. But once you lose that time, it's gone. And the crazy thing is you have no idea how much of it you have. You just don't know. And it's always at the end. Most people tend to wish that they had more of it. And so how we use it, how we should be using it, you know, these are important questions to answer and we're going to be talking about that today. Now, I believe that everyone should know the value of your time. And as best as possible, honestly put a dollar amount to it, because that will help you make decisions as to how you spend your time or decide not to spend your time, your time. And I think that's really important. So I'm going to talk about that process, understanding that, and how you can and should be using your time. And I think that first step starts with really understanding what your current situation, how much time are you allocating to the various things you are doing? That starts with usually doing a time diary. And I know it sounds kind of silly, but I've done it before. And maybe you might consider doing the same, which is that over the next week or so, maybe just for a couple days, really figure out how much time you're allocating to your work, towards spending time with family uninterrupted, how much you're spending to leisurely activities. And I know that so far has been definitely restricted in this time, but I remember doing this in a time where I was trying to play golf once a week or once every other week. The time that you maybe spend with your buddies watching a game or spending time hiking or just even going traveling and these kinds of things, how much time are you spending sleeping? And it's really important to do this because really you have a limited resource. Again, you have 24 hours. How are you splitting that up? Are you spending more time on Facebook, Netflix, you know, these kind of things. This point of doing this assessment is not to judge yourself, it's simply just to do an accounting so you know exactly how much time you're spending and allocating to each thing. Now, after you've done that, which is a very important step, the next thing to do is to start to try to figure out how to calculate the value of each of this time that you spend. Now, when you at work, it's pretty easy, I'd say, because you make a certain amount. Well, most people do, especially as physicians, you make a certain amount for the time you put in. We're essentially high paid hourly workers. And so one way we can do that is simply take the amount that you made last year, for example, and take the net income, meaning that assume that taxes were taken out, and then divide that by the amount of time you put in. And I factor going to work, coming back, and these kind of things as well. So let's say you made $250,000 last year and you put in 50 hours a week. Well, you just have to calculate that to figure out your net income time, or the value of your time. Net. Right? Right. And the reason that's important is that you're gonna start to make a lot of decisions based on that. Now, for a lot of physicians who try to do other things on the side outside medicine, which I believe they absolutely should, it's a hard thing to do, especially in the beginning, because the value of your time doing those things is nothing in comparison to the time that you spend in medicine. And that's absolutely true. So you make a decision based on the value of your time. So whether you've specifically or intentionally created that value or figured out what the value is, you've made decisions based on that. So I think that's really important. Put it down your work time. How much is that valued per hour? Right. And it's funny, because once you start figuring that out, when you start making certain spending choices, you start realizing how much time at work you have to put in to get that thing. So it starts changing your perspective on whether even buying that thing is even important. Right. Or whether it's worth the time that you're putting in. But again, I'm going off on a tangent here. Then figure out how much time are you spending with your family? Right. That thing you can't necessarily put a value on. Right. In terms of monetary value, let's say family, your leisurely time. Right. Or your sleep, necessarily. You can't put an exact monetary amount on it, but you can, kind of. Because I know that if you're like me, oh, I'm an hourly worker. I'm a shift worker. There have been times where I've had options whether I want to stay late to pick up another case, or whether I want to stay late and pick up another hour or leave early. Right. Or for you, maybe it's to extend your clinic for an extra hour or maybe cut back a couple hours. Right. And you've thought about how much you're losing if you're like me, like, how much are you losing by not working that time? Right. And I'm not sure what else you could be doing with your time. But you've essentially said that, hey, my time is worth this much and whatever I could have done with it that time, instead of being at work, it's not worth that amount. So essentially that's what we're doing. We are creating value on our time without you knowing it or doing intentionally by what, by how we decide to spend it. We're assigning a value to everything we do. And so that's an important thing to do. Start with that work time, how much is it worth? Right? Start looking at your family leisure, your sleep, and figure out whether how much value it gives you, right? Financially plus fulfillment wise. And think about it for work too, because work might give you a good amount of fulfillment as well. And start kind of crystallizing what is that worth? What is that worth? What is that worth? Okay? And then you have to start thinking about how to prioritize these things. Now some people say that, hey, without work, I can't even have family time, I can't have leisurely time, I can't even sleep uncomfortable, right? Or stress about my expenses or stress about my finances. And that absolutely makes sense. But it's important to think about it like in an ideal situation, what would take preference, right? An hour doing this, an hour doing this, an hour, this means more to you because at the same time, when these things like values align, right? Meaning that let's say you are doing a direct comparison in terms of the number of hours when you spend at work versus the number of hours you spend playing golf or whatever it is, right? Watching a TV show, going, hanging out with your friends, whatever that is, that you're going to have to figure out how to make a direct comparison there. And so once you've calculated that, then you can really start thinking about how you're gonna spend your time, right? And how much your time is worth. And it's sometimes it's eye opening to realize what that number value is. And some people might be excited by it, some people might be really discouraged by it. What I found is that most physicians actually undervalue their time significantly. And the reason I know that is that what they decide to do with their time is they decide to spend their time doing relatively meaningless stuff that they could be outsourcing to other people, but they decide to do themselves. And if they valued their time a little better, they might be not be doing some of those things. So that's really the last step here is once you've kind of really assessed where you're at, you've really calculated how much your Time is worth. You start to really figure out where your priorities are and how you want to spend them. Especially if they got butted head to head, you know, head to head, what you're going to take. And then the last thing is figure out how to leverage and scale your time better. And what I mean by that is, let's say you have an hour in the day, and you can either spend it doing a task, right, or you can pay someone to do it. That's a decision you have to make, right? What else could you be doing with that time? Because everything is about opportunity cost. Meaning that if you spend an hour cleaning your yard, right, and you could instead have someone else do it, hire someone else to do it instead, and you could be doing something else, could you be more productive with your time? That's how I tend to think about things, right? Again, it's different if that thing that you're doing brings you some sort of enjoyment and fulfillment. People say you can't put a monetary value, but you can on most of those things, right? For example, you know, for yard work, there's a certain point, right, where you would not pay someone to do that work for you. I think that physicians, especially considering what little free time we have, I absolutely believe that if something does not bring you ultimate joy or a significant amount of fulfillment, that you should be outsourcing it. Because there are most likely there are other people that can do it better than you do it at a cheaper rate in terms of the value of your time, that you could be spending it doing something else. For example, I know that a lot of people at home, I know that a lot of people always have that debate whether they should be hiring someone to clean their house. And it's a lot of physicians, they kind of go through that and they want to save money by not hiring someone to exactly just clean their house. They do it themselves, but they absolutely hate doing it. Now, for me, I would tell them absolutely outsource and hire it. There's no question in my mind, especially if there's no fulfillment from it. Because that hour, that two hours, that three hours, for some people, depending on the size of your house, you could be doing some amazing things with that time. You could be spending with your family. You could be working on your business ideas. I mean, how much is that worth, right? You could just be working at the hospital and you could probably pay for several of these, right? I mean, many, many of these cleanings, even with just one hour. So you have to decide at the end of the day, what brings you joy, what's worth it, what's not, and then ultimately make decisions that leverage your time and create the most value possible from it. Another area that I see a lot of people make these kind of decisions is when they decide to take a certain flights and they decide whether they want to go nonstop versus one stop versus two stop. And I get it. I mean, it's. The price can vary wildly, but people forget sometimes how much their time is worth. I mean, I remember I had a friend who was trying to decide we were trying to go on vacation and meet them somewhere. He decided to take a flight that had two stops with one, had a six or eight hour layover, and he ended up in the destination significantly later than I did. And we were coming from different areas, but during that time I was already able to explore some of the city, spend some time there, whereas he spent most of it in an airport and had to make multiple stops and all to save a few hundred bucks. And I said that, hey, at the end of the day, like your time is worth so much more than what you try to save here. And we went through this whole exercise for how much your time is worth. And yeah, he just realized that, hey, I've been spending my time wrong. And I'm not saying that everyone needs to fly, you know, nonstop or these kind of things, but at least think about it from a time perspective and not just financial. And the same thing is for those people who wait an hour, two hours in line for a free ice cream scoop. Right? Right. Now what's going on with healthcare workers? I know that McDonald's is giving free meals and I'm a big fan of the egg McMuffin and I'm thinking about getting. But if the line were too long, no, there's no way I'd wait in line for a free meal when you could just go and pay five bucks for it. So, you know, these kind of things are things that, you know, if you can get your perspective right in terms of how much your time is worth, it totally changes the way you act and make decisions. For me, my family time is the most valuable thing and I value it at the end of the day more than I do my time at work. Meaning that if I have to make a decision when it comes to, for example, seeing my kids go to sleep and at night and I get to see them for an hour, then I have to make a significant amount of money for that to be worth it. But most of the time there isn't an amount that I can potentially make as a physician, especially with that hour, that's worth it. So I make the decision as much as I can to go home and spend the time with my family. And I hope you're making those decisions as well based on your time, knowing what your time is worth, especially now in this time, your time is going to be devalued, and it probably has been for many people. So knowing your worth and knowing what you want it to be worth will impact where you go from here. I would say the choice to work harder for the same amount, which is the decision that a lot of physicians make, which is when their time is devalued, they just work a lot harder to make the same amount is an unsustainable thing. It might work in the short term, but it just traps you in a faster hamster wheel and you're going to run out of gas a lot sooner. So my solution for that, if there is one, is to figure out ways outside of medicine to create income. We've talked so much about passive income, we're going to keep talking about that. But that's one way to increase the value of your time is by creating passive income sources. Because let me tell you, in medicine, the value of your time, well, if anything is just going to go down over time, that's just going to continue to decrease. And that's playing a losing game if you expect to get everything that you want purely out of medicine. And that's been my stance, and it's a stronger stance now that we've been through all of COVID and the coronavirus, period. But anyways, I'm just curious what you guys have been thinking about in terms of your time. How do you value your time? How do you calculate it, and how do you make those decisions? I'm curious. There are going to be some show notes along with this podcast. I'd love for you to find it on passiveincomemd.com podcast and leave a comment for me. I'm still learning so much in this area and I'd love to hear from you. Till next week, stay safe and healthy, keep up the great work and we'll talk again soon. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you part of our community yet? Join thousands of physicians who are also on this journey to creating their identity ideal lives through multiple streams of income. You can join us on our Facebook group Passive Income Docs and you can always learn more at our website, passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.