Unleash your Inner Hasselhoff for Greater Riches
“There’s nothing in the fridge right now so let’s just go out for dinner”
“I’ve read that Mr. Money Mustache claims to save $94,432 every ten years by riding a bike, but I don’t HAVE a bike, so that’s not an option for me”
“It would be nice not to have to drive an hour to work, but it’s just so much hassle to move to a new house”
Whenever I hear people explaining some of the biggest expenses of their lives, they are usually expressed in terms of emotions, hassle, and fear of the unknown. They are afraid of making changes in their lives because they are imagining a great tsunami of pain and inconvenience washing over them as soon as they try to change the status quo.
Oh no! I can’t deal with the hassle! My life is already hard enough!
But guess what? You’re already IN the tsunami, Sukka! How much hassle is it to get up uncomfortably early every morning, rush through breakfast, drive on a crowded and/or slushy road, stare out the office window as day after beautiful day slips by, and maybe miss out on bringing up your own children because you and your spouse both work full-time jobs?
So you’re already an expert at dealing with hassle. You do it every day, and the reason you do it is for MONEY. If you have a job that you keep mostly because you need the money, you are a professional hassle-manager. Let’s invent a slick new word for it – you are a Hasselhoff.
As a Hasselhoff, you should probably start looking around at who will pay you the most for putting up with hassle. Right now, perhaps you make $60,000 per year, which is $28.84 per hour. After all taxes, let’s say that is about $22 per hour. You can advance to a better job, but maybe there are some other ways to use your time where you’ll get paid even more.
What about the pickup truck owner at the top of this article? He has a 2005 Ford F-150. He drives it to work as well as using it for weekend ‘hauling’ and even road trips. But in truth, the truck is only loaded up with so much stuff that it wouldn’t fit into a good hatchback car about 4 times per year. He drives 15,000 miles per year at an average of 17MPG. This costs him $3300 in fuel.
If Mr. Pickup could grow a bit of a Money Mustache and switch to a normal 5-passenger car that got 32MPG, his fuel cost would drop to about $1750… saving $1500 per year.
Now he has $1500 to spare, and 4 days per year when he can’t quite fit everything he needs to haul into his Toyota Matrix. That is $375 per day. He has to either rent or borrow a truck to carry this stuff, or pay for a delivery truck. And he gets paid $375 to do it. Assuming the borrowing takes 4 hours longer than using his own truck, he is getting $93.75 per hour for his Hasselhoff abilities, compared to the $22 per hour that he gets at work!
Now that you see where I’m coming from, you can see that you ALSO are getting a raise over your day job by going to the grocery store, and spending the time to get yourself a bike.
But what about the biggest hassle listed above, moving to a new house?
It sounds like a big project. But I’ve done it a few times (currently on my third owned house and 9th address including rentals over the past 15 years), so on the most recent move I actually kept a work log of how much time it takes to move. I included sprucing up the old house for sale (or rent), house shopping, getting a mortgage and going to two closings, packing up the old house, doing the move in a $50 rented Uhaul truck, and unpacking into the new house. Overall, it took about 200 person hours, equal to about one month of office work including commuting, or one month of the average American couple’s combined television watching.
If this couple considers themselves professional Hasselhoffs and is earning $22 each per hour, then the move costs them $4400 of their time. If they are buying and selling a $250,000 house, and they lose 6% in realtor commissions and other closing costs, that adds $15,000. Yeesh, that’s about 20 grand in total. Will they ever get that back?
The short answer is YES – making a move like this actually saves them about $1600 a month – enough to pay for the 20,000 in relocation costs AND have about $1450 a month left over to turbocharge their ‘stash! (I included the math to back this up at the bottom of this post so you can review the calculations).
Using my usual 10-year example, this family who moves closer to work will be about $256,000 richer after ten years, just for moving! This is a gigantic part of what anyone needs to retire.
My job as Mr. Money Mustache is to teach you that whenever you hear the hassle bell ringing and trying to sway your purchasing decisions, make sure you sit down with a calculator and see if it’s actually a hidden opportunity to increase your pay as a Hasselhoff. If you’d like some help with the calculations and some free entertainment to go with it, send me a comment with your own situation and we’ll see how we can increase your pay.
Their new house is within year-round biking distance (3 miles) of one job and medium car commuting distance (10 miles) of the second job. The old house was an average of 25 miles (40 mins) away for EACH person. Let’s assume they both still drive for simplicity.
Old situation: 80 minutes round-trip x 2 people = 160 minutes/day = 53 hours/month.
53 hours/month x $22/hour = $1173 per month of commuting time
Plus driving costs of 50 miles roundtrip * 2 people * 20 days/month * 50 cents/mile
= $1000/month of commuting costs
Total: $2173/month for commuting
New Situation: 10 car-minutes for the close worker + 32 minutes for the further one, round-trip = 14 hours/month = $308 per month of commuting time
Plus driving costs for (6+20) roundtrip miles per day x 20 days/month x 50 cents/mile
= $260/month in commuting costs
Total: $568/month for commuting
Savings: $2173 – $568 = $1605 per month
If you use $150/month of this to service the debt on the extra $20k of moving costs, you have over $1450 left over.
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