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Does working cost money?

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Gogreenbuddy
@gogreenbuddy
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Does working cost money? What I mean is a 9-5 job where you work for a monthly salary and having no time to follow the crypto world. In a month I will finish my project for work and leave the company. So it's a good time to calculate how much I should earn in each city and estimate the opportunity cost of selling my time.

When an employer pays you a salary he does that in exchange for 4 main things:

  • Your time
  • Your skills/knowledge
  • Your location
  • The inconvenience

Let's break those four down.

My Time

You would say that easy that's 40 hours, but in my case, it's 42.5 hours as breaks are often not paid in big corporations in Poland. The travel time is 30-60 minutes per day effectively making it at least 45-50 hours per week.

It's important to know your hourly rate including travel and break time.

My Skills:

So why are companies interested in me? it's often not the degree you hold but a certain skill. In my case, it's the Dutch language, experience in the transition of outsourcing projects & stakeholder management. The main reason they pay me is because of the dutch language. Everyone has 1 main skill from certified welder to senior c++ developer or something like that.

Know your skill, know what it's worth in each area or country.

My location

People get paid more in certain locations. Does this offset the higher rent, general prices, and often noisier areas. For example, Warsaw is easily 300 euro's a month more expensive than Wroclaw(Bresslau) a smaller city and 50-100% more than a tiny village. The average salary is 1250 euros in Poland.

The inconvenience

Some jobs are not taxing, some jobs are very heavy. Do you have a casual 15min walk to work or are you dependant on public transport? Lunch from work or you bring it yourself? Does the job hurt your health, can you do the job your whole life?

Let's do an exercise

So let's calculate which one of the options is better for me.

A: Warsaw, 3000 euros bruto, office job, high pay but expected to work hard. B: Remote job, 2000 euros, low work pressure.

Option A adds rents of 500 euro's, adds 7 hours of traveltime. 3000-500 = 2500 / 49.5x 4 hours = roughly 12.5 euro an hour. Option B 2000 euro, no travel time and the breaks are in your own house. 2000/40x4 = 12.5 euro per hour.

So the options pay the same even though warsaw pays 50% more, have a stressed life in warsaw and no time & energy to work on side jobs. After taxes the Warsaw option even pays less than option B!

Opportunity cost A big overlooked concept what I didn't touch upon yet is opportunity cost. What this means is if you decide to do A you often can't do B anymore.

Intense jobs+ high travel time often means that you got no chance to leave the ''rat race'' and less chance to develop skills opportunities to get passive income or your own company.

It can be better to be a parking guard with lots of idle time to develop your blockchain developer skillsets, than to work 80 hour weeks as a doctor in some countries.

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