JoeRetire wrote: ↑Thu Sep 02, 2021 2:04 pm
sureshoe wrote: ↑Thu Sep 02, 2021 11:48 am
Why is it silly? Everyone puts a value on their time.
Let's pretend my time is worth $100/hour.
If I start work at 8:00 am, what is the cost to me of getting up at 6:00, getting ready, and driving one hour to work?
If I start work at 8:00 am, what is the cost to me of getting up at 6:00, getting ready, reading the newspaper for an hour, and starting to work from home?
Do you see any real difference here?
So the fact is, "putting a value on your time" is how you evaluate it. If the OP wanted, he could pick up side work at $40/hour or $70/hour - and the freed up commute time might enable that.
If someone decides to "pick up side work" for the 40 minutes saved by a shortened commute (perhaps a school crossing guard if the timing magically comes out just right), that demonstrates a real value. Otherwise, silly.
"Putting a value on your time" is one of those squishy, trite sayings we all use. It's not at all the same as "Let's say your time is worth $40/hour. 8*40 = $320/week. That's $15k in time you're buying back."
Yes, I "see a real difference". You are treating salary and income as the end-all-be-all. It isn't. You conveniently ignored the comparable examples I gave you, but I will use you yours.
You commute to work for 45 minutes each way and make $100k, but your current employer opens an office right down the street from you. But, it's in a different tax locality which will force you to pay a 2% work-in tax, but your commute drops to under 5 minutes. Would you take the "pay cut". I would bet a large majority of people would. You've put a "value on your time", you're willing to take a $2k NET income pay cut.
Same situation, but you have to cross a toll bridge or parking garage which adds a $10/day expense. Now, you're taking a $2k tax hit and a $2500 (50 weeks *5 days *$10) commute expense. Do you still do it? I'm guessing most people who make $100k/year do - because they save 165-ish hours a year for a cost of $4500. They paying about $27 for each hour and it's a value.
Now, use that same example, but it's a higher tax rate and commuting expense - more like $5500... lots of people would do it, but maybe a few less. What about $7000? There is a point where people eat the commute rather than the expense, because they "put a value on their time."
And guess what - ALL those calculations would be different for someone making $50k vs. $250k, because they each put different values on their time.
If you had 2 job offers for 2 nearly identical jobs. 1 was a 10 minute roundtrip, 1 was a 3 hour roundtrip, but the 3 hour job was $1000 more, would you take it? No, of course not. Because - you "put a value on your time". What if it was $5k more. Probably still "no". What about $40k more. Hmmm... starts becoming an interesting conversation - because it crossed your "time's value". And I had a guy who commuted 1.5 hours each day who worked for me - so it happens.
So it isn't trite or silly or squishy just because you don't see it. It's what EVERYONE does, whether they realize it or not. But like I told the OP, because of "loss aversion", people can't see past what they're losing.