How to make $1,000 per hour

Do you know how much your hourly rate is worth? Because I don’t think you do.

Right now, I bet you are adding up your annual salary plus bonus, divided by the number of hours you work each year. Seems logical, right?

 Wrong.

 You see, every task you perform at your job or business does not have equal weight. Some of the tasks you perform cost you money. They give you a negative net return.

There are tasks you perform which are one-time revenue earners. Some tasks you perform reap continuous earnings long after you complete them.

 The goal is to find the continuous earning tasks which earn you money, and focus on those. I’m going to prove your earning potential based on your true hourly rate.

 How to make $1,000 per hour

The other day, I read a case study about an eBook author. With each book, his writing gets stronger, and so do his marketing. His following grows and so do his sales. He recently published his fourth book. It took him 20 hours to write and format the book for publishing. His current book earned him $20,000 as of this week.

Let’s do a bit of math:

$20,000 / 20 hours = $1,000 per hour

Now, this author took time to build up his audience and writing skill over the years. So there is an extra time investment. Yet, now that he has reached this point, I argue that his current hourly rate is $1,000. Because nothing else he does during the day earns this kind of money.

He should stop sending emails and doing mundane chores. Instead, he should outsource all those tasks and focus on writing more books. Don’t believe me yet?

 Consider this: this author’s latest book stimulated other sales outside of the $20,000. When I say other sales, I mean upsells. For people just discovering him and his books, 20% of them bought at least one other book. Some of them bought all his books. And some of them bought other products he had.

Using analytics, this author estimates the upsells from his newest book total $12,000. Now pause for a moment and think about that, he spent no extra time promoting the other books. Yes, he spent time writing them and outsourced the work for some other products. Since he completed that work, the hourly rate spent increases. And none of that accounted for his latest book project.

If we add $20,000 + $12,000, we get $32,000. Let's divide that new revenue figure by the original 20 hours to put together the latest book. We get a revised hourly rate of $1,600 per hour. And that represents sales up to this point. As more people buy his latest book, that number only adds to the revenue applied to the 20 hours spent. This makes his hourly rate increase.

Your True Hourly Rate

When you put a value on your time, make sure you account for lost revenue via opportunity costs. While you were doing mundane chores, you ended up losing money. How? Let me explain:

Consider a person who makes $25 per hour doing what they do best. They spend two hours every Saturday working on chores. To hire an assistant to do these chores costs $15 per hour. Now, let’s review the lost opportunity cost here:

Scenario 1:

This person does their own chores. They spend two hours working on the chores. They do not owe a maid anything. Yet, they lose out on $25 x 2 = $50 in revenue because they did the chores.

 Scenario 2:

This person pays the assistant $15 x 2 = $30 dollars to do the chores. Meanwhile, they work on what they do best for those 2 hours. They make $25 x 2 = $50 and owe the assistant $30 for a net profit of $50 - $30 = $20.

Scenario 2 is the clear winner, because they walk away with profit and the chores got done, all in one fell swoop.

What is your true hourly rate?

Now, imagine your true hourly rate trends more toward the author I describe earlier. How much money are you losing due to opportunity cost? How much money do you lose by not focusing on your high earning core skill?

 As you go through your daily checklist today, ask yourself one question:

How much is my true hourly rate?