Recently, I spent some time figuring out my true hourly wage for my real job and both of my side businesses. For those unfamiliar, one’s true hourly wage is the amount of income they make per hour when including all time spent because of that job (work time, commute, business functions, etc.) and subtracting out all of the expenses related to the job (transportation, nice clothing, gifts, etc.).
In the end, any effort that one can make to increase their true hourly wage is going to improve their life dramatically. Thus, it’s worth my time to take a look and see how I can best raise that hourly rate for my real job and for each of my businesses. Let’s take a look.
The Simple Dollar
Per hour invested, The Simple Dollar pays me the highest wages of anything that I do. For some of you, that might be surprising, but let me add a few caveats. The first several months of this blog, I earned almost nothing for the effort and, also, on an average day I have three hours total invested in the site, which is far less than the total time I have invested in my “real” job.
This calculation was pretty interesting, and it begs an obvious question: should I immediately drop everything and spend my time working on The Simple Dollar, since I earn the most per hour by working on it? The honest answer is that I shouldn’t, and here’s why.
First of all, additional time spent working on The Simple Dollar, for the most part, equals diminishing returns. Recently, I reduced my rate of posting here, which has reduced the amount of time that I spend working on the site in a given day. What was interesting is that it didn’t actually reduce my traffic at all – in fact, the upward traffic trend hasn’t changed a bit since I made the move (allowing for seasonal fluctuations). It was because of that reduction in time that my “hourly rate” for working on The Simple Dollar improved.
Second, that current hourly rate that I earn rests on the back of a lot of work invested in the buildup. Many of my visitors come in via Google searches. Because I’ve written so much for The Simple Dollar, there are a lot of different search terms that people can type into Google and find The Simple Dollar. So, my hourly rate is nice now in large part because of the hard, non-lucrative work that I put in before.
In a way, it’s like residual income from any form of writing, except the pay rate per writing is much lower. On any given day, a single article in the site’s archives makes a penny or two. Thus, when I write a new article and it eventually slips off the front page, it does continue to exist and is found by readers, but by itself it doesn’t earn much at all. Now, The Simple Dollar has somewhere around 2,000 articles in it, so each of those articles earning, say, a penny every day adds up to $20 a day. Thus, in a way, any income I make from The Simple Dollar now is much more akin to passive income than active income.
So how do I maximize my hourly rate for The Simple Dollar, given all that?
First, I continue to write good posts that are compelling to read. This blog is successful because of the readers, and the readers only come because I have something theoretically interesting to say. Without that, the readers go away, the links go away, and eventually this all dries up.
Second, I continue to write them at a regular rate to build up the archives. The more posts that wind up in the archives, the more likely a person searching Google is to discover The Simple Dollar. That’s one of the reasons I was conflicted about reducing my posting rate recently – one big reason I am able to attract new readers is because of the size of the archive, and by slowing down the writing, I slow down the growth. In the end, I went in the direction that my readers wanted, for better or worse – it does free me up a bit to seek other opportunities.
Third, I look for new ways to share my writing with others. Does this come in the form of a magazine or newspaper column, or a book, or something else? If I can find ways to share the stuff I write for The Simple Dollar easily with other places, that brings in more readers and perhaps more income.
Surprisingly, more advertising doesn’t do the trick. All more advertising does is annoy people, driving them away and leaving a bitter taste in their mouth. We’ve all searched on Google and found some very annoying ad-laden sites – I have no interest in that. It’s bad for me as a reader and anything I don’t like as a reader is something the people who read my stuff likely will hate, too.
My hourly rate for this is surprisingly bad, because I spend perhaps 75% of the time invested in this side business trying to find new clients. When I’m actually working, my rate is quite good – but that work is relatively rare.
Thankfully, since my focus is so local, I can usually combine advertising efforts for this endeavor with participation in community events. I meet people, hand out my card (with rate info right on the back), and enjoy myself in other ways.
How do I maximize my hourly rate for this side business?
First, I take a serious look at how I’m promoting it. Given that I spend most of the time for this project on promotion, maybe it’s time to look at what I’m doing wrong. Clearly, something isn’t clicking – perhaps I need to seek out other methods of spreading the word.
Second, I adjust my rates. I actually think my real work rates need to go higher, not lower. I’ve been told recently by two people that they were surprised that I fixed things so quick and so well, because they figured based on the prices that the work would be shoddy. It’s probably time to seriously rethink my rate card.
Third, I look at altering or expanding my services. At this point, many of the people I know locally are aware that I have turned The Simple Dollar into some form of success – in fact, there are probably a few people on my block who lurk here (or maybe not… who knows). One possibility might be to expand into developing web sites for local businesses at a reasonable rate and hosting them on the server I use for The Simple Dollar – since they would be low traffic and static, this would be pretty simple. It’s an avenue to consider, at least.
Really, what I need to do is reduce the percentage of my time spent on promotion, but without just abandoning all sense of promotion. It’s a balance that I’ve not quite found yet, and I am probably promoting too hard.
My “Real” Job
What about my real job? There, I’m salaried. I focus on doing a quality job on the work assigned to me and turn in great reports. The hours vary somewhat, but for the most part they’re pretty stable and I don’t gain much benefit out of working excessive extra hours – and I wouldn’t get paid for them, anyway. Plus, there is a proscribed pay scale, publicly posted and used, for all people in my department. Thus, it’s fairly difficult to maximize my hourly rate there.
That doesn’t mean I can’t try some things, though.
First, I practice frugality in terms of my work expenses. Maximizing my gas mileage during the commute is one big step, as is reducing the size of my work clothes budget.
Second, I keep my social network alive to keep an ear out for great opportunities. There are a number of startups in the area that match my skill set. If the right opportunity came along, I might be interested in joining one.
Third, I take advantage of the educational opportunities afforded by my job. My job pays for some limited further education and we’re permitted to spend a small percentage of our time furthering our education. To this point, I haven’t properly utilized this opportunity, and doing so could increase my value in the marketplace.
Looks like I have a nice checklist of things to work on!