Trading time for money is a system whereby we are paid by the hour. Basically, this is the primary way that employees get paid – on days when employees do not work, they do not get paid. Not only is this exhausting year round and bad for lifestyle design, it is an irrational, flawed system that does not incentivise anyone to work harder.
Fortunately, you can avoid the time for money trap if you are a remote worker. You will be incentivized to not waste time, be more productive, and hopefully work for yourself besides your company.
I discuss why hourly pay hurts most employees, except for remote workers who game the system to get ahead.
Why hourly pay makes no sense
Time is of essence in the business world. Suppose that you are a freelance designer, and both you and your competitor can produce a logo of a quality that is worth $10,000. However, your competitor takes a whole month to do it, while you can do it within 2 days. Who is of higher value?
The answer is you.
Because you can produce at top quality while saving your client’s time, you are more deserving of getting hired, and you can potentially charge more money. Since you are time efficient, you free up time to take on more clients and improve your monthly earnings.
Let’s now talk about employees. By the very same logic, employees are supposed to be paid more if they can deliver their work at a quicker, more efficient pace without sacrificing quality. As they get their work done efficiently and have remaining time to take on more work, they should get paid even more.
But is this the reality?
There is obviously no such reward in an hourly pay system. Instead, if you are an employee who is very efficient at completing tasks, you have to 1) continue sitting in the office and 2) take on more work given to you (since management would not allow you to idle around). Essentially, you are punished for being productive, because you are trapped in an hourly pay system.
Well, you escape both of these situations when you work remotely. If you play the game, you will be freer. In contrast to the employee trapped in a corporate office, you neither have to sit around and waste time, nor do extra work without extra compensation.
When you work from home, you can stealthily reduce your hours. (Why would you participate in a system that makes no sense? No one works a full 40 hour week anyway.) No one needs to know whether you completed your work in 25 hours or 10 hours. If you finish your work in 2 hours a day, just say nothing, switch tabs on your computer, and start working on your other businesses and projects on the side. Leave your computer, take breaks, spend time with your family, and no one is there to question you.
How remote workers can game the system to get ahead
In an ideal world, you would sell a service for a flat rate, not your hours. For example, you could sell coding services for $1,000 and it does not matter if it takes you only 2 hours to solve the problem of your company or client.
Remote workers can somewhat live in such an ideal world. Essentially, when you reduce your hours, you are “altering” your hourly rate. If you are paid $4,000 a month but take your hours down from 44 to 20 hours a week, you have “raised” your hourly rate from $20.5 to $45.2.
Reducing your hours in this way is possible, since most employees only do 16 hours of real work anyway and squander the remainder of the 40+ hour week. Unlike most employees, you have the opportunity as a remote worker to not waste any of the remaining time, since you are not chained to an office and monitored by your bosses.
This means that you can use the freed up time to create additional streams of income for yourself. This is crucial in the volatile modern economy, even if you love your job. You can start multiple side businesses, do freelance work, or even pursue a second remote job.
Unlike employees who work in an office, as a remote worker, you are thus incentivised to be more productive. Productivity results in time savings and potentially new income generation. It is ultimately on you to design your day and be productive in getting tasks done at your job in as short a time period as possible.
As a remote worker, if you focus on completing key tasks instead of trading in a fixed amount of weekly hours, you are leaving behind the “time for money” paradigm.
Avoid the hourly rate trap if you work for yourself
How much is an hour of your time really worth? If it takes you one hour to complete a service for someone, consider the true cost that you put into delivering the service.
Remember that you probably spent *at least a few months or years* learning how to perform that service and perfecting your craft.
The hourly pay system does not work for anyone. Even if you eventually start a business and work for yourself, you want to steer clear from hourly charges. A client or company is essentially paying for your skill and expertise, not your time.
This is a win-win scenario.
You do not have to be dishonest. If you can complete the service within an hour, you do not have to drag the service out over multiple hours or days, just so that you can earn more income. Instead of an hourly rate, a flat fee 1) helps you save time, and; 2) prevents your client/ customer from questioning why you are deliberately doing the job slowly.
On the other hand, if you mess up and take a month to perform that service, your client/ customer is not penalised for your mistake. Since you charged a flat fee, your client/ customer does not incur additional monetary costs which would make them very unhappy.
Summary
Trading time for money is irrational and fundamentally flawed. At a job, you will not be incentivized to be more productive, as being productive will not benefit you. A business will allow you to kill this system entirely as you can price yourself based on your expertise, skill and level of service.
But if you do not own a business (yet), you can at least transition into a remote job, so that you can game the system – reduce your job hours, and spend the extra time generating new income streams for yourself.