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Many people like to think that in order to make money, you need to have some sort of job, where you work for a boss and then get paid. While this is true to some extent, this is very small and limited view of how money works. First, it is beneficial to understand how exactly the current economic system came about.

In the general case, people are exchanging services and/or resources, and money is just one particular type of resource. Therefore, when you agree to work for a boss for money, you are actually exchanging your service of doing what your boss wants, for the resource money which your boss has. Holding this view is very useful in that while it is true that your boss is hiring you, you are also hiring your boss! That perspective will help you a lot when asking for a raise, or looking for a job in general, but that is a subject for another article.

So what exactly is a service? Well, in essence, it is your time + your knowledge of doing a particular task (which is actually also a form of your time). Hence, to be even more simple, you are essentially trading your resource of time for your boss’ resource of money. So how do you spend your time to get money? Here’s a couple of steps:

- Go with the opportunities that are already available for you. These are generally options you have with the current skills you already possess. For example, you may already know of a McDonald’s opening, which pays you $8/hr between the hours of Monday-Friday, 9am-5pm. Or you may know of a publishing company which likes your articles, but it pays $50/hr but available once a month.

- Spend time finding the opportunities above. This may involve networking, going to job conventions, speaking with entreprenuers, thinking up good business ideas, etc. The point here is to develop options for particular time slots at a particular hourly rate (or expected hourly rate if it’s a high potential thing). For example, you might come up with playing poker, which yields an opportunity which gives you $20/hr of expected value any time you want, or you might get a job offer which gives you $30/hr for 40 hours per week.

- When you are looking for opportunities, you will find that a lot of them have prerequisites. That simply means they want your time in a different form. For example, if your job requires that you have masters degree, that just means your boss wants your time converted to the form of a masters level of knowledge for the job at hand. This is actually something very useful to keep in mind when you are interviewing for a job.

So now that you have all these time slots with dollar values and prerequisites (which you can convert to either time or dollar values), it becomes a scheduling problem. Just try to figure out the easiest way to fit these opportunities into slots that maximize your value. If you have trouble doing this, you can use a standard scheduling algorithm. Doing this, you can figure out how much each hour of the day is worth to you. For example, if you work at a job, your hours of 9am-5pm is worth say $30/hr, but if you do nothing afterwards, your 5pm-12am hours are worth $0.

To take this further, you can assign a dollar value to everything you do in life. This is purely arbitrary. We automatically assign a value to doing some things in life anyway. For example, we like to eat ice cream and don’t like to die. If we’re going to measure these things, we need some scale. If we use a different scale than dollars, then everything (including your hourly rate), would have to be converted to that scale. I figure it’s easier to use scales that already exists – $ and hours. That way, using the scheduling algorithm above, you can completely optimize your schedule based on weights ($ values) you assign to each task.

Obviously, there’s a lot of fuzzy areas. What expected dollar value should you assign to “thinking about new business opportunities”? Also, there’s all sorts of constraints like eating would not be a good task to perform 3 hours in a row, or swimming would not be a good task to perform at 4am. However, like most real life problems, if we use some assumptions, this is still a very useful way of optimizing your time and converting it to money if you so desire.

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21 Responses to “How to Convert your Time to Money”

  1. Always Run on June 13th, 2007 12:16 pm

    [...] like $10/hr. So 1.5 hours/day * 365 days * $15/day = $8212.5. Assuming you have some knowledge of converting your time to money, what an easy way to make $8.2k/year and have a healthier [...]

  2. Greg on June 26th, 2007 9:06 am

    You have missed the the most important concept regarding the conversion of time for money. MOST people (ie – the NON-wealthy) simple go through life trading time for dollars, at the best exchange rate they can secure. The wealthy learn at some point (better late than never!)that this is NOT the way to wealth. You must LEVERAGE your time. The prudent path to wealth is to find ways to put other people, and money, at work FOR you. There are various ways to do so – examples: investments (typically slow, and can be risky); real estate (need some expertise here, and some initial funding); running your own business (leveraging the output of your employees – can be exilerating but exhausting!)

    I believe on of the best options available for the average person is network marketing. Warren Buffet (investment maven), Robert Kiyosaki (financial author), Donald Trump (need I clarify?), David Bach (financial author), Paul Zane Pilzer (economist & presidential advisor) have all recently recoginized the potential and power of this method of leveraging your time.

    If you evaluate upon the correct set of criteria, it is not difficult to find a home-based, network marketing opportunity that has tremendous potential, and is comfortable for you. I created a speech for my Toastmasters Club on How to Evaluate a Network Marketing Business – and will gladly share. Send me an email at Yes – I am in a business myself, and yes I will suggest you at least take a look at it if interested, BUT the document will give you what you need to succeed whether my business interestes you or not!

  3. Warren on June 26th, 2007 9:47 am

    Greg, leveraging your time IS a way of getting a better exchange rate of time for money. In this case, the exchange rate would be fluctuating quite rapidly over time depending on the amount of money you have. Howevever, getting that money to begin with requires your investment of time. Therefore, you should be able to write your exchange rate at any particular point in time as F(t), where t represents the infinite set of time points and actions that have already occured.

  4. wema7300 on August 29th, 2007 8:35 am


    I agree with you all. But what about long-term investments on yourself…For examples, browsing this Blog at this moment right now. I am not getting any better rate by reading it if looking at tangible terms… In fact, I could have been reading other stuff like stock tips to maximize my investment profit.

    I don’t think anyone could scientifically value “exchange rate” precisely, at least not before they see the outcomes of their intangible investment…For examples, most of us go to university, dedicated our time and perhaps take a loan for a piece of paper, and hoping that this piece of paper will land us better ‘money’. Guess what, Warren earned 700k from poker machine, and I don’t think Warren had a ‘mater of gambling’:-P..Sorry Warren, don’t mean to be offensive here!

    My suggestion, do what want to do, Do it well, and enjoy the process… Money will then come to you automatically… Depends on what you do, monetary award might vary in amounts, but what you gain is the ultimate wealth, which is happiness and satisfaction!

    Money is never enough for us (just being human)… If making money chasing as your ultimate goal, you are bond to fail…Why don’t we replace the term money by ‘WEALTH’… because most of us, wants money for one reason…which is to satisfy their needs…It could be physiological need, safety need, or esteem needs, but it all channels to one goal – self actualization at a certain time point of life…(Thanks to Maslow). People who have archived self actualization are happy people…and happy people attracts good fortune – the law of attraction.

    Let’s work hard to be “WEALTHY”

  5. Sharon Wilson on February 6th, 2009 9:28 pm

    I enjoyed your post. Your analysis was exceptional and thought provoking as is proven by the great comments it has received.

  6. motivation on January 27th, 2010 4:24 am

    Good article. Using time to create money is one way but the best way, in my opinion, is to use time to create residual income. As time goes by, your money will make you even more money. With the all of the opportunities on the internet these days, doing this has become a bit easier.

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    Monetizing some hobby and living space to keep some other life’s activities unmonetized – I am for this approach that gives freedom to be flexible and open to opportunities beyond their monetary value.

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    There are various ways to do so – examples: investments (typically slow, and can be risky)

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