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> (...) and it also took several hours of my time, which probably cost me more than a new generator. I do a lot of repairs and maintenance at my own house. Las
by jventura 3y ago
> (...) and it also took several hours of my time, which probably cost me more than a new generator.
I do a lot of repairs and maintenance at my own house. Last year I built a terrace and an extra room, and only had to pay someone to help me, and this week I painted the all house exterior with the help of my dad. Total costs of painting and entire house: 240€. It would cost north of 2000€ if I had to pay someone to do it.
Yes, my "hourly rate" for that kind of work is sometimes much less than my "regular" work. But I can fix many things, don't need to go find "credible" people to do things for me, I fell an immense pleasure to be self-sustainable (for that kind of things), learn a lot; and my house, cars, electronics, are mostly in top shape.
- madsbuch 3y agoIt is quite interesting to calculate the true cost of doing things itself. In Denmark the tax system is such that if you subcontract out of personal money they need to be 5 times fast than you. If we say that you can make your deck in half the time a professional would have don it, the factor is still 2.5x. Ig. assuming a contractor would do it for 50 USD/h, this would translate to "making" 125 USD on hour by doing it yourself, 250 USD/h if you know what you are doing. Obviously these things change with tax regimes.
- mithras 3y agoI have the same thing, I feel these high income taxes force me to do repairs and home improvement myself because the converted hourly is higher than my own generous contracting rate.
- imtringued 3y agoThat is what taxes on trade do, they make trade more expensive. This is why income taxes are counterproductive but they are easy to calculate and enforce so governments rely on them.
- Shaanie 3y agoI'd like to see the math for your calculations here, I suspect something is a bit iffy. As an example I'll use Swedish taxes which should be comparable to Danish ones. If we assume I'm a contractor charging $100 per hour and take the cash as salary: (100/1.3142) * 0.5 = $38 left after payroll tax and the top income tax rate (50%). So if I'm just as fast and good as a professional, the professional needs to charge $38 per hour or less for it to be worth it. But in reality, a professional is probably at least 2x as fast as me, making it $76. That's probably less than they charge, so it's worth paying for a professional.
- madsbuch 3y agoThe person you contract also pays income tax on the amount. So you need to doubly add the tax. Then you also need to add some cost of doing business. Said in another way: The 100SEK you earn becomes 25SEK the contract can use (assuming 50% tax rate) – that's the first factor of 4. The last factor can be found in the details.
- Shaanie 3y agoI think that's a logical error; I don't care about how much the contractor makes after tax, I only care what the cost to me is. After all, if the contractor had some strange anomaly where he pays 100% of his income in tax, why would that matter to you?
- madsbuch 3y agoOn the contrary: My initial statement had nothing to do with price negotiation. All I was trying to assert was how the tax implications are when you do something yourself vs. when you subcontract. Do it yourself: Miss out on that hours worth of salary Subcontract: 2 times tax is paid. Obviously this has implications on negotiation. This is exactly the reason why services are considered very expensive in the Nordics (as in 80USD to get your hair cut). Note that this needs to be compared with a company getting their stuff fixed. Their contractor costs are fully deducted from their income.
- detourdog 3y agoAre there tax implications to doing the work? I don’t understand the need to do the caculation.
- madsbuch 3y agoNo, but you pay an average of 40% income tax, 25% VAT, 150% on cars (+ 25% VAT) and the European gasoline tax. The result is that the tax system disincentivizes these types of transactions when you can not deduct the costs in your personal tax bill. Said in another way: you don't pay income tax when you paint your own house.
- detourdog 3y agoGot it the formula is to figure out the tax reduction for doing one's own labor at an established rate.
- madsbuch 3y agoThis is interesting, do you have some resources on this? (Sorry, I am just a computer scientist with an interest in economics, so I don't know the established theories)
- detourdog 3y agoMy outsider view is the desire to account for all labor output. If the labor of painting one's own house goes un-accounted for it distorts the view of the current state of the economy.
- ClumsyPilot 3y agoThis is a clever observation thats poorly phrased.
- flushit 3y agoRelevant: https://www.lesswrong.com/posts/ZpDnRCeef2CLEFeKM/money-the-unit-of-caring https://www.lesswrong.com/posts/ZpDnRCeef2CLEFeKM/money-the-... (Also discussed recently on HN.)
- bartvk 3y agoWhat I found out, is that it takes a painter team two days, and it takes an untrained single person two weeks. I once wasted my whole holiday on painting the house. And it wasn't well done, because it was my first time. I'll probably not do it again, unless I don't have other work.
- bloak 3y agoWhat I've found is that it's very often worth doing your own painting, but if you need carpets laying or walls tiled, then get a professional, because the professionals are awe-inspiringly fast and do a better job.
- ghaff 3y agoThe thing with painting--at least interior/trim/etc.--is that it'd 1.) Not that hard; 2.) You do it repeatedly so it's not the usual: Do it once poorly and never do it again; and 3.) If you're touching up something already painted, you can probably take some shortcuts a professional won't.
- antod 3y agoI will pay for exterior painters - the cost to my own state of mind with painting a house is too high. I will glady do harder jobs than painting myself, but nothing pisses me off more than painting for some reason.
- jventura 3y ago> I once wasted my whole holiday on painting the house. And it wasn't well done, because it was my first time. I'll probably not do it again, unless I don't have other work. If you would have to do it again, would you do the same errors, and the paint job would turn out equal? Or would you do better second time? That is why I never painted an entire house before having painted a bedroom at least one time. And I've never painted a bedroom before I painted a small piece of furniture at least one time. One needs to learn gradually, hopefully with someone who knows how to do things. Last year I built a terrace and room with the (paid) help of a contractor. I started just carrying the trash, then breaking things, then putting cement of the walls, etc. etc. Now I can quite complex things by myself.. The key is to do things gradually..
- thworp 3y agoWhile I appreciate and share the DIY spirit, some doubts have been creeping in recently. Firstly, in most cases we are just DIY'ing the final "craftsman" step of the work, we still depend on the materials being available. Second, if more and more people that actually care about work quality go DIY it leaves people who can't or won't be as involved. Over time unscrupulous tradespeople will take over the market.
- mantas 3y agoOn top of that, would you earn your usual rate for that time? I wouldn't work saturday afternoon anyway because my head is already useless for programming. So I do need to change line-of-work somehow. I can either go for a walk and learn something about nature. Or I can self-repair something and learn something about construction. Of course spending all free time on self-repairs would be exhausting. But I don't feel like lying on a couch entire weekend either.
- jventura 3y ago> On top of that, would you earn your usual rate for that time? This is the key! I do these kind of things on my spare time! On my spare time I could (1) do nothing; (2) try to cram more screen time into my life, and give the money earned to someone to do my repairs for me or; (3) do some things by myself, learn while doing it, and feel like a super-human that can control is own life (well, some of it). I prefer number 3!
- Tyr42 3y agoI got a young little one, so I've actually needed to take some Mondays off to finish some of the home repair tasks. It's not like I can go around with a hammer while he is trying to nap. So it is more comparable with the work rates, since I do not have a lot time time to tinker
- mantas 3y agoI bought a half-built house right after the kid was born. Yes, using power tools while kid is napping is no-go. But after few months kid is not napping that much. And there’re many relatively silent jobs. It’s easy to silicon a window sill while kid is sleeping in another room. Or assemble a drawer with an old good screwdriver instead of a drill. And after a couple years there’re endless learning possibilities. Sure, it goes slowly, but it does happen eventually. Full disclosure - I did hire handymen for a good portion of jobs for various reasons. Mostly because we were burning a lot of money in rent or some jobs require too many special tools and knowledge to be done right (electricity, drywalls, etc).
- bombcar 3y agoThe "hourly rate" argument is a bit slippery; you didn't stop working (and being paid) to fix your generator, and unless you could have spent those hours being paid (hard for many people to do) you only "lost" the hourly rate you could have gotten, which is often much lower than your current work hourly rate.