The Money Blog

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How to calculate your (real) hourly rate

Jan 27, 2022

I don’t price the purchases in my life in dollars. I measure these costs in time.

Before I buy something, I quickly calculate how many hours (a small consumer item) or years (a house) I will have to work to pay for it.

This regularly forces me to think in very concrete terms about how I am using my time and life’s energy.

The base formula is simple:

In what is a typical week for you, divide your pre-tax earnings by your working hours (clinical and administrative).

But there is some subtlety here as you will need to adjust for overhead, taxes, and whether the expense is corporate or personal.

Your Hourly Rate takes practice, but I promise that it will be transformative in your everyday life.