Alright, brace yourself I a about to apply some economic theory to the real world. Yes I am that crazy and luckily there won’t be a lot of numbers involved so it is safe to continue reading.

Take two activities, it doesn’t matter whether they’re chores or enjoyable activities. Now you are going to prefer one of them over the other, so going to a water park might be more fun then sweeping, unless your afraid of water. This means that you value the time spent at a water park more then time spent sweeping, which is pretty understandable.

Now in order to make this more applicable to the real world, try and place a value on that time. So for enjoyable events it is the maximum you would spend to go, and for boring things like chores it is how much you would need to get paid in order to do it. This allows you to give a number to each activity and allows you to really see if your doing what you want. Everybody’s numbers will be different since each person has different preferences and has a different value of time.

Now for work its a bit different since you have to include the money you make too. So if you earn $10/hr of satisfaction from your job and then earn $20/hr for working, you are gaining $30/hr ($10 + $20) from working. But say you hate your job and you actually lose $5/hr of enjoyment. Instead of gaining $30/hr you would now only gain $15/hr ($20-$5).

I hope that is the most confusing part Now think of how you live your daily life.  Are you working for $25/hour when you would pay $30/hour to sit in the sun and read? This means you aren’t as happy as you could be. So change that! Start getting the most value from your time, although wealth can buy you a lot things it cannot buy you happiness. Wake up each day with the idea that your happiness is the number one goal, soon you will realize that earning the most money per hour wasn’t what you really wanted.

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Filed under: Personal Development, Retirement