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LM: #340: The trap of the aspirational hourly rate
I used to subscribe to the “aspirational hourly rate.”
You set some unusually high “hourly rate” for your time, and anytime you have a chance to save time for that amount or lower, you take the hit. So if your aspirational rate is $300 an hour, and hiring someone to clean your apartment saves an hour, you can easily afford to pay $200. Or if you buy some headphones for $50 and they don’t work, you just buy a new pair instead of spend fifteen minutes processing a replacement.
I have to admit, this way of thinking does wonders to undo irrational cultural programming. If you grew up in a family with the mentality of, We can’t spend five more minutes at lunch because then parking would cost 50¢ more – not because we can’t afford it, but simply because it’s an amount – it can help you realize not eating in a rush is more valuable than 50¢, or that debating between two cans of soup with a 5¢ price difference is a waste of energy.
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But, I’ve found the aspirational hourly rate has limits, and now rarely use it.
For all its supposed valorization of sanity, it’s actually a pretty stressful way to live. Things you try to outsource never go as smoothly as you had planned. You ordered that Uber just as the plane landed because 15 minutes waiting is worth $75, but now you’re scrambling to get there before your car is cancelled.
The aspirational hourly rate is a trap for creators, especially. The idea was popularized by Naval Ravikant, a startup investor. In that context, supposedly you’re using that time and energy to do high-leverage deals that one day retroactively make your time worth, say, $5,000 an hour.
But as a creator, you get the most leverage from having high-quality ideas. If you’re good at working according to the stages of creativity, and allowing incubation to improve your thinking, a la Mind Management, Not Time Management , time isn’t your bottleneck. If anything, strategically-placed chores such as washing the dishes or folding laundry can be high-leverage activities.
And a long financial runway is a must for creative endeavors. I don’t look at $20 avocado toast and think of the down payment on a house that could have been made – I think of the novels that could have been written. Money spent foolishly is creativity squandered.
So now I think the aspirational hourly rate is a somewhat-useful mental tool – but ultimately, for creators, a trap.
Aphorism: “Haste is universal because everyone is in flight from himself.” —Friedrich Nietzsche
Cool: Otter.ai is an AI note-taker. I use it to generate transcripts of brain-dumps as I walk, which I then discuss with ChatGPT.
Best,
David
P.S. If you’re using the aspirational hourly rate, consider the variable money-value of time.
