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The True Value of Your Time

The True Value of Your Time

Have you ever stopped to consider the value of your time in a scenario where you accomplish everything by yourself with no outside assistance? This would mean that closing a real estate deal would have the same time value as buying a roll of stamps.  In other words, the highest and most productive use of your time has the exact same value as the least productive use of your time.

Using the Pareto Principle

Using the Pareto Principle, where 20% of your efforts create 80% of your income, the True Value of your time is the value of your time when you are most productive. You must increase the TOTAL value of your time by using leverage and delegating certain activities to hire staff that does not require your special talents, in order that you can focus on the top 20% of the money-making activities in your business.

Example: Let’s suppose that you make $350,000 per year, work 50 weeks per year, and 40 hours each week, adding up to a total of 2,000 hours worked per year. Your unleveraged time is worth $175 per hour ($350,000

income/2,000 work hours).  However, just 20% of your time was spent on activities that generated 80% of your income.

Using the 80/20 rule, you are only at your peak productivity for 400 hours per year and have misallocated 1,600 hours to activities that only produced 20% of your income.

Therefore, the true value of your time is when you are at your peak productivity or, in this example, $700 per hour ($350,000 x 80% of your income=$280,000/400 hours=$700 per hour). Your non-productive time is, therefore, worth only $44 per hour ($350,000 x 20% of your income=$70,000/1,600=$44 per hour).

What does this mean?

What this means is that you should hire someone to manage and complete the tasks that are a misallocation of your talents (the least productive use of your time). You can hire this person in a full-time position, pay them up to$44 per hour, and still expect to come out ahead on the arrangement—as long as you discipline yourself to focus on your top 20% and let your employee complete those tasks that are a misallocation of your time.


Reminder: There are many different people in this world who you can hire at many different pay rates. Make sure that your new hire(s) is fairly compensated so you can minimize employee turnover. You goal is to hire competent people and keep them for many years. Don’t just hire people to fill an immediate need without thought to the future.  Carefully screen your prospective employees for the skill sets necessary and willingness to perform the job.


Caution: The cost of a bad hire could set you back months in achieving your financial goals. Do not take the hiring process lightly. Do not hire people just because they need a job.  If you decide to hire family members or friends, think about the consequences this will have on your relationship if things were to go badly. Take it from the author—after you fire a family member who was not pulling their weight in the business, hamburgers and hotdogs might not be the only thing getting roasted at the family BBQ.

Your goal after delegating your low-yielding tasks to your staff is to focus exclusively on the highest yielding activities in your business (prospecting, deal making, etc.).  Imagine what your income would be if, instead of spending 400 hours per year on your most productive tasks, you spent 1,000 hours per year maximizing those opportunities.  To use the numbers from our previous example, your income would increase from $350,000 to

$656,250 per year after paying out $87,500 in salaries.  Yes, you are going to make a lot more money.

As your business grows, so will the demands on your time.

It is only fair to mention that you will never completely achieve your goal of exclusively focusing on the top 20% of productive tasks.  As your business grows, so will the demands on your time. You will always be evaluating what the most productive activities are and delegating the rest to hired staff.  Some agents have hired professional drivers to chauffeur them to and from the office so they can maximize their productive time.

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