How to Calculate Your Aspirational Hourly Rate?

One of our greatest assets is time and the surest way to predict our future is by examining how we spend our time. If you have financial goals, it’s important to calculate your aspirational hourly rate so that you are able to figure out how to use your time effectively. In this article, I will explain how to calculate your hourly aspirational rate and why it’s important to know.

What is an aspirational hourly rate? This is how much money you desire to make per hour. This is not your current hourly rate, this is your goal. It is important to calculate your aspirational hourly rate because it will tell you about what tasks you should delegate, automate or possibly even remove from your life.

Naval Ramikant, self-made multi-millionaire said: No one is going to value you more than you value you. Set a high personal hourly rate, and stick to it. When I was young, I decided I was worth a lot more than the market thought I was worth. And I started treating myself that way. Your hourly rate should seem absurdly high.

Before you go ahead and calculate your aspirational hourly rate, you need to know the answers to the following questions:

1. What is your dream annual income?

2. How many days per week would you like to work?

3. How many hours per day would you like to work?

Now that you’ve got the answers to the above, let’s calculate your aspirational hourly rate:

1. Take the number of hours you want to work per day and multiply that by the number of days you want to work per week. E.g. 3hrs x 5 days = 15 Hours per week

2. Take the number of hours you want to work per week and multiply that by 52 weeks, which equals the number of hours you would like to work per year. E.g. 15hrs x 52 = 780 Hours per year

3. Finally, take your aspirational annual income and divide it by the number of hours you would like to work per year. This will be your aspirational hourly rate. E.g. €240 000 ÷ 780 = €308 per hour

Now that you know how to calculate you aspirational hourly rate, see if you can outsource or automate every task that pays below that rate. The example above is conservative and I hope you are thinking bigger!

I am currently in a busy ‘season of life’ (as I like to call it). I am getting little sleep and we have two young children who need all of our attention. You may be in a different ‘season of life’. Perhaps you recently immigrated, started a new business or are dealing with a health issue etc.

I recently hired a nanny to take care of our daughter for 2 hours per day so that I can solely focus on working during this time. We also have a cleaner who comes every week. Outsourcing a cleaner and a nanny has taken a huge load off my shoulders. Even though I enjoy cleaning and absolutely love taking care of my baby, I just need to allocate some time to be able to focus on my goals.

Something else I am looking into is seeing if it is “cheaper” for me to get a professional chef to prep all/some of our meals for the week. We spend about €500 per month on groceries and it takes me about 2 hours per week to go shop for them (unfortunately, we don’t have online grocery shopping where I live). On top of that, I spend about 2 hours per day cooking and cleaning. Don’t get me wrong, I LOVE to cook but sometimes I just don’t have the time to cook an insanely awesome meal for our family of 4. I don’t enjoy grocery shopping though; I would much rather go do something fun with the kids instead of hit the aisles.

It certainly feels strange to pay someone else to do something for you that you can easily do yourself. In times like these it’s helpful to remember that money will always be there; it’s our time that is limited.

Below are a few more ideas of tasks you can outsource:

• Meal Prep or Personal Chef
• Personal Assistant
• Cleaner
• Driver. This will enable you to work while you are commuting instead of doing the driving.
• Personal shopper/Stylist. This person will save you time and money by shopping for clothes that actually look great on you (and can all be done online).
• Personal Trainer who comes to you instead of you going to the gym. Your workouts will also be more effective as they are tailored to you.

I am learning that many of these things seem like they would cost a lot but it is all about what we choose to prioritize. For example, would you consider cutting down on drinking alcohol, eating out and your monthly Netflix subscription in order to pay for an online personal trainer instead?

You can tell a lot about what a person values by seeing how they spend their free time. Take some time to reassess your finances and what you are spending your time doing.

How can you make more time to spend it on what truly matters to you? These can be things like spending quality time with your children, bettering your health or working towards your financial goals.

As always, thank you for reading! I would love to hear what you think in the comments below!