A cornerstone of the Afford Anything philosophy is that every choice you make is a trade-off, and that applies equally to your time and your money.
So what do you do about outsourcing? On one hand, the more you outsource, the more you trade money for the most valuable possession on earth: time. That itself is a pretty strong argument for outsourcing as much as you can.
On the other hand, your money is limited, and if you want to Afford Anything, you have to trim back from spending on things that aren’t your Big Priorities.
So how do you decide what to outsource and what to do yourself? Here are couple of questions to ask yourself before you pull the spending trigger:
#1: What Else Would I Do With This Time?
If you’re a freelancer or consultant who charges $80 an hour for your services, it doesn’t make sense to wash your own dishes … until, of course, you consider the fact that you can’t work 168 hours a week.
At most, you can work 40-60 hours per week of sustained, focused effort. (I’d argue that the number is closer to 40.) The more excess time you spend at work, the less productive you become. You’re better off spending fewer, more focused hours working. Then go home and unwind by grocery shopping, cooking dinner, washing the dishes, reading a bedtime story to your kids, and doing all of those other “mundane” tasks.
Yes, you could send someone to buy your groceries for you, at a rate of perhaps $15 an hour. So if you earn $80/hr at your job, the math doesn’t make sense … until you accept that the human mind is limited. Our focus and concentration is finite. We’re not robots. We’re better off spending fewer hours at the office.
Parkinson’s Law states that work expands to fill the time you give it. Spend fewer hours working, and you’ll be able to do more in less time.
#2: How Much Will Slowness Cost?
Buying a rental house? Every month the property sits vacant, you’re losing money. If doing-it-yourself takes five months and outsourcing it takes only two months, you’ve “paid” three months’ rent by refusing to delegate. That’s a lost opportunity cost.
On the other hand, if you want to fix part of your own personal house, and there’s NO financial benefit from getting the job done fast, there’s a stronger argument for doing-it-yourself and taking your leisurely time.
#3: How Much Will Sloppiness Cost?
If you’re dealing with something technical or complex, and fixing your mistakes will be costly, you may want to enlist an expert.
Why do you think I bought my house at such a steep discount? In part, because the previous owner insisted on doing a lot of fix-it work himself. I’m sure he Googled “How to …. XYZ.” But he lacked experience, and his shoddy work made the house worse, not better.
His self-inflicted DIY damage brought down the price of his house. Lose-lose situation for him.
#4: Does This Drain My Energy? Or Re-Fuel Me?
There’s a very strong argument for outsourcing the massive drudgery that tires us down rather than re-fuels our energy. At a certain point, scrubbing the baseboards behind your toilet is a waste of your time. If you can live a more satisfying life by outsourcing that task and spending the extra hours with friends/family/volunteering, do it. Your life is valuable. Don’t waste it scrubbing toilets.
(Important! ONLY outsource this if you’re already financially stable. That means you’re free from consumer debt and you’re investing massive heaps of your money towards buying your way to financial freedom.)
#5: Can I Earn More By Outsourcing This?
If there’s one area in your life where I’d argue that you should outsource the most, it’s at work. After all, your mental bandwidth is limited. Hire people to execute your tasks so that you can focus on top-level growth. It’s a fantastic way to spend money.
Wealth is built by teams. Mark Zuckerberg didn’t say, “You know, I can build Facebook by myself. I’ll personally answer every customer email. Just imagine the money I’ll save by not hiring an assistant!”
Steve Jobs never said, “Who needs developers? I know how to program.”
“But Paula,” you say, “my company isn’t as big as Apple or Facebook! I just run a little design/writing/marketing business!”
Yeah, and your company will always be little if you insisting on doing every last iota of your work in-house. You realistically cannot work more than X number of hours per week.
Once you have even a little bit of income coming in, reinvest that money into buying more hours in which you can grow your business. And don’t feel guilty about going home at 5 pm.
A lot of people try to circumvent this by working insane hours. “I can work 100+ hour weeks!,” people tell themselves. “I’ll never see my family, never exercise, and only eat bowls of cereal at my desk. But I won’t be outsourcing anything!”
That’s insane. It’s not sustainable. You’ll burn out. And I bet you’ll spend at least 20% of your time putzing around on Facebook or Twitter or e-mail, pretending to be productive while you’re secretly stressed and procrastinating. (Ask me how I know!)
Limit your hours, outsource at work, and value your time.
The key to Affording Anything is recognizing that outsourcing is an investment, just as much as buying stocks or houses is an investment. But you have to be strategic about it. Otherwise, you’re not getting a good return on your investment.