The Opportunity Cost Fallacy
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[This is a guest post by Nelson Smith who blogs over at Financial Uproar.]

At some point in your life, I guarantee you’ve paid somebody to do work that you’re simply too lazy to do yourself.

I do it all the time. I pay somebody to do even the most basic repairs on my car. It’s not that I can’t change the air filter, I just don’t want to. I’ll gladly pay the guy at the shop an extra $15 to do it for me.

When I sold my house and needed the carpets steam cleaned, I called someone to do it for me, even though going to the grocery store and renting the machine would have been cheaper.

And I’m a little ashamed to admit this, but I buy food on a regular basis with the condition that my girlfriend cooks it for me, in exchange for her free meal.

Most of us are really busy. Between kids, work, and doing stuff around the house, there’s not a whole lot of time left over. When time is of the essence, thoughts turn to what a burden some of these chores become.

So we come up with a solution. If I make, say, $25 per hour at work, I can easily afford to pay somebody $15 or $20 per hour to do the jobs I don’t like. For every hour that I spend doing other jobs, I’m losing that $25 per hour I could potentially be making.

It seems good on the surface, but in reality that logic is really screwed up. Here’s why you’re losing money by outsourcing your life.

1. True wage. Most of us make this comparison between our wage and the help’s wage without taking the time to crunch the numbers. After taxes, and work deductions, my $25 per hour wage might only be $20 per hour, or even lower. And what about other costs, like commuting? An hour long commute each way would knock my net wage down further, to approximately $15 per hour. Suddenly, the spread between my wage and my help’s wage is gone. It’s a break even proposition at best.

2. Unlimited work hours don’t exist. Besides, we’re looking at the $25 number all wrong. How many of us work at jobs where we have the opportunity to exchange an unlimited amount of hours for $25 each? Most people are either on a salary – meaning they get paid the same no matter how many hours they work – or they barely have any chances for overtime. Even if you wanted to exchange extra hours for more money, the opportunity might not be there from your employer.  Of course, you could always use this time to work on a side hustle.

3. Leisure time is worth less. Even if you had the chance to work as many hours of overtime as desired, I’m willing to bet most people wouldn’t max it out. Time away from work is important, I understand. But it’s also worth less. If cleaning out the gutters was worth as much as highly skilled labor, then it would be paid like highly skilled labor. For most people, taking an hour of your off time to save $20 is a terrific investment. Look at it like that, rather than like work.

4. You’ll just squander this time anyway. Most weekends, I make myself a to-do list. Then baseball comes on the TV. And I get distracted with video games. Suddenly, I realize it’s Sunday afternoon and I haven’t accomplished much. I spend the next few hours getting the important items on the list done, and put off the rest until next week.

If I were to create myself an extra couple hours each weekend by outsourcing some piece of work, chances are I’d waste my entire weekend, instead of most of it.

In today’s society, we view being busy as some sort of badge of honor. How often do you talk to people who constantly bring up how frazzled they are? It’s like if we’re not busy, then we’re not accomplishing anything.

So we do what illogical humans do – we lie to ourselves. Study after study has proven that, when it comes down to it, we work significantly fewer hours than we think. We convince ourselves that we don’t have time to do that unwanted chore, but that’s just not true. We’re just looking for an excuse to get out of it.  Even if you truly are scheduled to the max, there are always ways to make more time for yourself.

And hey, that’s okay. Like I mentioned, I regularly pay people to do work I’m too lazy to do. I fully encourage you to do the same, with one condition.

You must have your financial house in order. If you’re paying off consumer debt, or even student loans, you’re paying somebody to do work for you with financed money. That money could be used to pay down debt. Essentially, you’d be paying someone $15 or $20 per hour plus interest to do your unwanted work.

But if you do decide to outsource unwanted work, can you present it like it is? It’s not a magical lesson in efficiency. You’re just paying someone to do work that you’d rather not do. That’s it. Enough with treating it like it’s anything different.

Do you agree?  Should I be willing to pay people to do work that I’m too lazy to do myself?  Please leave me a comment below.  Thanks!

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