Is a Penny Worth Your Time to Pick Up? (A lesson in Opportunity Cost)
Here is the answer you have been waiting for all your life. The analysis is in and here are the results:
(A lesson in Opportunity Cost)
If you make under $105,000 per year, it is worth your time to pick up the penny. (Simply divide the number of seconds in a year by ( your salary) and multiply by 3 to see how much it cost you to pick up the penny).
This assumes it takes 3 full seconds of your time to spot, bend down, and pick the penny up.
There you have it, however, I would advise that spending the extra time with your children and saving your back is a much better use of your time.
For those who are curious:
Tiger Woods, anything under $8.00 is not worth his time.
For Oprah, she should look the other way for anything under $20.
And finally for Howard Stern, anything under $26.50 should send him running back to the studio.
Opportunity cost in your life:
Everyone’s time does have value. The idea is to do the things that make your time more valuable for your family, job, and activities. If you are conscious that your time does have value, you can begin to understand what you need to weed out in your every day life and replace with productive activities. It might be watching less TV and taking more courses to increase your wage earning potential or eating less dinners on the road and spending more time with your family. Point is, be conscious of your time and how it is allocated.
It is not always about money. The value of a strong family or relationship does have value that may not be directly attributable to financial benefits. Know what that is and find the right balance between financial value and emotional value.
Homework: Try assigning values to your average day activities. Remove the ones that add no value and replace them with ones that do. For two weeks change them up and see if it makes a difference for you. If you are a nagging wife? try no nagging and see if your husband responds. Do you hardly talk to you boss? try talking to him on subjects you know he/she likes and see if their reaction and respect towards you changes. Read the comics? try reading something that brings you value in your career or family life instead. Are you shy? Try talking. It is only for two weeks, the world will not end.
These simple tips will not solve your problems, but perhaps they can help you start something new and reduce the activities that bring you no value. Businesses run these analysis all the time and for good reason. It helps to prioritize projects and activities so that the company can be successful. There is no reason why we can’t add a little business intelligence to our every day lives to help us become more successful.