The cost is way more than what you spend!

When we buy goods or services, we rarely consider the time cost that is associated with the purchase.

Which is more expensive: a wifi switch for $25 or a Dimmer for $46? At first blush, the dimmer seems more expensive, but when you consider that the wifi switch didn’t work after more than 40 minutes of trying to make it work, and had to go back costing additional time, it’s no longer that good value. Consider the dimmer took less than five minutes to install and configure.

At a nominal $30 an hour value on a person’s time, the “we never got it to work” wifi switch cost $45 and we got no value at all. After a refund that “cheap” device still cost $20 and we got nothing. The dimmer’s effective cost $48.50 it was still better value even if the other device had worked!

All too often we only consider price and never consider what it costs in our time and effort. Training is a great example. Back a few years Total Training had a comprehensive After Effects training course with over 40 hours of lessons. Most people didn’t realize they were making a $10,000 investment.

Forty hours just to watch the content once. To learn you’d need to watch at least twice, more likely three times. Then to work along and reinforce the learning would be another 2-3 times the length of the course. It’s reasonable to consider that you’ll spend a month’s working time on transferring the content on the DVDs to your brain, you only have to be on $2500 a week for the cost to exceed $10,000 in lost opportunity cost. The other alternative though, is to slowly fall behind because you’re not learning enough to keep up!

Learning new software is expensive. Upgrading an operating system – even one that incurs no direct charge – is still expensive as you lose 2-3 hours of productivity. If you’re a programmer it can take a week to get back to the same development environment. That free OS upgrade could cost a programmer $3-4,000 in lost income producing time.

Don’t be fooled into valuing your time at nothing.

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