Wednesday, March 17, 2010

What is Your Per Hour Rate?

I used to be obsessed in the past with calculating my per hour wages. This was simply calculated by taking one's gross salary divided by no. of hours worked in a month.

Per hour wage = Gross salary / No. of hours worked in a month.

Of course, the person who had the highest per hour wage had the biggest boasting rights. Afterall, he or she is "valued" more highly by society based on an hour's work compared to the normal worker.

In the past, I used to work close to 9 hours per day. That worked out to 45 hours per week and 180 hours per month. Based on my pay, that worked out to roughly $27 per hour. The only way to increase my hourly pay was to work less. That meant going to work later or leaving office earlier. Of course that did not go down well with my work ethics and I refused to do that. But when confronted with the cold hard facts, I realised that there was no other way to increase my pay per hour unless I got a pay raise or promotion. I was limited by the fixed pay concept.

Right now, I realised that one can actually earn a much higher hourly wage if you are doing your own business. Not all hours are created equal. Some people can earn an hourly wage of $50 to $80 dollars per hour. Others can even charge as high as $300 per hour!

I looked through the classifieds the other day and realised that some workmen or carpenters were charging easily $50 for changing faulty cabinets and stuff. That means that in one day, all they have to do is to fix 4 cabinets and they could easily earn $4000 per month! And if you have seen them change cabinet doors before, you know that it is a pretty simple task that could be completed in less than an hour.

What is your hourly wage? Are you limited by a fixed pay and thus unable to increase your pay?

13 comments:

  1. Why limited yourself to hourly pay? Learn to get paid through ROC (Return On Capital) and good to acquire this skill.

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  2. You have to include their travelling time.

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  3. Also must take into account the carpenters' availability of jobs... Maybe they don't get to repair four cabinets a day. Maybe only four cabinets a week?

    $1000 per hour X 0 hour; still = 0.

    High return means higher risk, i guess...

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  4. It is better to view how productive you are rather than $/hr. If you are a business owner, you would not have the luxury of calculating $/hr. You would only know whether you have made a profit after you received payment from your customers.

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  5. Per hour rate measures how valued your work is I guess.

    As a fixed income employee, there is little way to negotiate this.

    As a business owner, you can look into ways to increase your profit margin so as to improve your per hour work rate.

    As an individual, we should look for ways to increase our per hour work rate. Not all hours are created equal. A tuition teacher charging $30 per hour for 1-on-1 tuition versus one who charges $50 per hour for group tuition of 5 students. Same no. of hours put in but different monetary results.

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  6. If you are referring to a tuition teacher, then you are your own boss/business owner. You then have to decide your best business strategy of either 1-to-1 or group tuition. Then and only then can you get out of the fixed income employee mentality. It's tough being your own boss.

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  7. Don't forget as a tuition teacher, one will be burning away most of one's weekends earning money while one's young kids are looking forward to family weekend outing with both parents.

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  8. Hi bro8888,

    Need not have to burn weekend. Let me work out first, and i'll keep you updated :) I think I can work out a nice schedule to fit family and work all at once :)

    Can be done!

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  9. cw888, there's no need to burn weekends for that although I'm doing so to accelerate my savings before marriage.

    LP, want to exchange MSN and share ideas?

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  10. I always thought most money are earned during weekends for certain professions like hawkers, taxi drivers, tutors, etc

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  11. Yep. Weekends are a time of rest for some but for others, it is time for making money or a living.

    Did you all read the straits times on Saturday. There are coaches who are earning $1000 over dollars per hour. They help to conduct training for professionals and executives.

    Not all hours are created equal. This people with their mouths are able to earn more in 1 hour than what a cleaner would earn in an entire month of hard labour.

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  12. Ang Peng Siong charges so much more for kids swimming lesson. Super tutors too. Be the best and charge more. Super traders and investment bankers earn indecent bonus.

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  13. You mean Ang Peng Siong can charge more than $1000 per hour? That is amazing.

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