Selling your time for (more) money

The typical person has 90,000 hours in a lifetime to generate wealth.

The most common way to do that is through a job, which is any arrangement that lets you sell your time for money.

At a higher level, we are just transmutating our life energy into money. It's the only form of alchemy that works – turning blood into gold.

Why do we do that? To survive in the physical world.

Money is a store of value and a unit of exchange that can be converted to consumption now or in the future.

We measure the rate at which you can sell your time in Money Per Hour, e.g. Dollars/Euros/Pounds/Yuan (whatever your local currency) per hour.

This rate of conversion is not always directly correlated to the time you put in. Some jobs (e.g. hourly work, non-partner lawyers, fixed salary jobs) are tied more to your input of time, while others (e.g. sales, investing, jobs where variable compensation dominates) are tied more to the value of your output.

The common characteristic of all jobs is the lack of ownership – if you stop working, you stop earning.

There's a growing trend viewing jobs as bad, where the desired end goal is to achieve financial independence through a side hustle or investing so you can rid yourself of the yoke of indentured servitude.

That's not a bad idea, but jobs are not a terrible thing either. They are the onramp for billions of people into the economy, and the main means of survival. To many, they are the route to keep your family alive, a source of dignity and a path to mastery in a certain field.

But jobs can also be tedious and frustrating. Every person's situation is different. For most, the key question is how to make more money in a job.

The main way we can increase your time-to-money conversion rate in a job is through Formal Education, which allows you to access better jobs that pay you more Money Per Hour.

Some pooh-pooh Formal Education, advocating instead on developing useful skills or self-directed learning. I think that makes sense for a certain class of people, such as entrepreneurs and techies.

You don't need to go to college to learn anything useful, and it's almost certainly not a good idea to saddle yourself with a decade of debt if you can't see a good Return On Investment.

But many jobs still require credentials to access the opportunity. Without the right credential, you won't even have the opportunity to do that job.

Personally, I think it's only worth paying for Formal Education if it gives you good branding (e.g. the top universities) or access to a job you want. If your university does not have name brand recognition, or if you know what you want to do and don't need a degree to do it, don't bother.

But in general, Formal Education is a proven way to make more money. The data shows there is a clear relationship between a person's Formal Education, their earnings, and their unemployment rate.

The higher your level of Formal Education, the higher your earnings and the lower your unemployment rate. In the US, the median person with a bachelor's degree makes 67% more ($1248 per week vs. $746) than a person with a high school diploma, and is much less likely to be unemployed (2.2% unemployment rate vs. 3.7%).

Statistically, the more Formal Education you have, the easier it is to find and keep a job, and the more you will earn.

That's not to say it's a no-brainer. Formal Education is a big investment of your time and money. The ROI is usually positive over a lifetime, but do not blindly pursue it.

It's a proven path for many, but it's not the right path for everybody.

The key is knowing yourself – what you want, what you can do – and figuring out the best way to achieve that.

If you're going to sell your time, you might as well get more money for it.