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I think that OP raises a good point in this post, but I'm skeptical of whether his strategy is really applicable in the real world. Yes, there are obviously som

I think that OP raises a good point in this post, but I'm skeptical of whether his strategy is really applicable in the real world. Yes, there are obviously some cases where it may make sense to do the more expensive option in order to save time, but can this strategy really be used as an overarching decision making mechanism? I think not, primarily because of the fluctuations in productivity/necessity of productivity that happen from minute to minute, hour to hour. As OP says, he "use[s the] expected values throughout this post,"—I don't think average/expected value is really an accurate way to make decisions about non-averaged decisions. Primarily, if you always choose the more expensive thing to save time, justifying because your average value makes it worth it, you will inevitably end up "saving" time that is useless; therefore, you'll end up—on average—spending more money than the value you create. Does anyone else feel this way/think I'm crazy for thinking this?

NyxWulf 14y ago
Let's take the salesman example. A salesman isn't literally making $150/hour. As a hypothetical the value might be $0 in hour 0, $450 in hour 1 and $0 in hour 2 for an average of $150/hour. Much of sales work is this way, their is preparation time, and sales time. There may be prospecting, etc. So even though they may not make the money during that hour, if you are burning their motivation to prep or prospect you are burning their ability to get through hour 0 and into hour 1. Part of the reason to use an average is that it gives you a very simple, but generally applicable metric. There are always exceptions and the rate may change frequently or slowly. Those are nitpicks though. The general point is that your time should be valued against the best use of your time. For instance the hotel example only makes sense if the alternative to walking to the convention is working or more time networking to generate revenue. If the alternative is sitting in your hotel room longer watching TV then $160/hour is not the replacement rate.
SatvikBeri 14y ago
I found the opposite feedback loop. Namely, the more I spend money to avoid low-value tasks, the more my average value goes up, which in turn lets me spend more money. Example: I hired a personal assistant to take care of several tasks for me. I could have done them slightly faster myself, but this saved me a lot of time and mental energy, which I used to work on activities that earn me more money, which let me raise my rates, which let me outsource pricier stuff.

NyxWulf 14y ago

Let's take the salesman example. A salesman isn't literally making $150/hour. As a hypothetical the value might be $0 in hour 0, $450 in hour 1 and $0 in hour 2 for an average of $150/hour. Much of sales work is this way, their is preparation time, and sales time. There may be prospecting, etc. So even though they may not make the money during that hour, if you are burning their motivation to prep or prospect you are burning their ability to get through hour 0 and into hour 1. Part of the reason to use an average is that it gives you a very simple, but generally applicable metric. There are always exceptions and the rate may change frequently or slowly. Those are nitpicks though. The general point is that your time should be valued against the best use of your time. For instance the hotel example only makes sense if the alternative to walking to the convention is working or more time networking to generate revenue. If the alternative is sitting in your hotel room longer watching TV then $160/hour is not the replacement rate.

SatvikBeri 14y ago

I found the opposite feedback loop. Namely, the more I spend money to avoid low-value tasks, the more my average value goes up, which in turn lets me spend more money. Example: I hired a personal assistant to take care of several tasks for me. I could have done them slightly faster myself, but this saved me a lot of time and mental energy, which I used to work on activities that earn me more money, which let me raise my rates, which let me outsource pricier stuff.