Don’t settle for $1 per hour. Please!

Jacob over at My Personal Finance Journey is in graduate school.  I've been in graduate school, also known as Slave Labor, Class A.  (I opted out of Slave Labor, Class B, also known as a “postdoctoral fellowship.”)  Over at the Yakezie Forums when discussing whether or not to e-mail spammers about advertising, he quips:

Thanks for everyone's input. Very interesting. I think I'll just give it a try….Being in graduate school, my time is only worth about $1 per hour anyway! haha

Now again: I know exactly where Jacob is coming from.  Even with a research stipend, things are tight, and with the long hours a grad student puts in, $1 per hour doesn't seem all that far off.  We tolerate the $1/hour (or whatever) because we have faith that we're padding our earning power later.  That turned out to be the case for me, and I hope it does for Jacob.

Just don't let it go to your head

It's when that $1/hour mentality bleeds over into the rest of life, and affects monetary and time decisions for a long time, that it becomes a problem.  It manifests itself in a couple of ways: deliberately taking low-paying jobs or spending an inordinate amount of time to save a few bucks.  If Your Money or Your Life drives any point home, it's that we only have a finite number of hours in our life to do our work.  This isn't to say that money is everything, because it isn't. But we should be wise in how we work so that we're not spending our life working for less than minimum wage.

What are you saying?  Is a buck an hour too much?!

Amazon's Mechanical Turk impresses me by how little someone can earn by staying so busy.  Sign up and you too can earn two cents for locating contact information on a web page and pasting the appropriate information in a form.  This would probably take me a couple of minutes.  Multiply that by 30 and I'd earn a whopping $0.60 for an hour's work.  Some jobs pay better, but the best-paying job on that site was only worth about $20 — and that was to fill out a credit score form!  The others worth more than $10 were transcription jobs:  audio to text.  Some of the audio for these jobs was over an hour long.

Now, there are a couple of tricks to making low-paying jobs worth doing:

• Do the jobs, but for a higher price. My pastor is a meticulous painter.  He does exceptional work.  Whereas a hungry painter would charge $1,200 to $1,500, my pastor wouldn't take less than $2,000 for the same job.  Why?  He knows he's good, and he knows what will be worth his time.  He's busy enough with his “day job” that he doesn't have to compete with other painters, but he'll make time for the right price (an extra $500 to $800).
• Do the job, but make sure there's a back-end — meaning back-end income.  You can do a “get paid to read e-mail program” but make sure you also tell people about it in such a way that you can get extra for it.  The direct income from actually reading the e-mails might be nothing, but indirect referral income could end up being ongoing, passive income.  I haven't talked about MyPoints for quite a while, but I still get sign-up bounties from the articles I've written on it.

There can be such a thing as too frugal

Spending five hours to save five dollars is, in essence, working for $1 an hour.  If you're able to make $50 per hour, it costs you $250 to spend those five hours to save a measly $5.

Jeff Yeager does this, but he embraces it and turns it into a lucrative living in other ways.  His cheapskatedness doesn't really count here.  What does count here is the following:

• Sometimes it is more cost-effective to pay someone instead of trying to do it yourself. This involves knowing your limitations and knowing when you need to cut bait instead of fish.  I've gotten into this situation more than once myself.
• Sometimes other things are just more important than saving a few bucks. Sacrificing time with family, sacrificing morals, sacrificing peace of mind, sacrificing sleep — the list could go on and on.
• Sometimes it's necessary to spend money to make money. This is one area I haven't exercised myself enough yet, but trying to do everything can limit side business growth, and overall income potential.  Instead of looking for ways to save $5, look for ways to make $100, even if it costs $75 to do that.

Financial stability and comfort doesn't come at $1 per hour. Please don't settle for it!