Why you should always monetize your time…consider a side hustle.
Any professional should always monetize their time because time is the finite resource that you do have. You only have a certain amount of time to devote to earning income. Anything that you were doing with your time that does not earn income or bring you some type of improvement in your life or pleasure you should probably not be doing. Calculating the amount you earn per hour is highly beneficial for deciding on if you should take a certain position or ask for more money or if you should be doing the activity that you were planning on engaging in.
For example:
It takes me approximately 2 hours to clean up my driveway after a massive snowstorm. If I were working as a moonlighter/contractor for those two hours I would earn anywhere from $320 to $640. It is not something I enjoy doing and it costs about $600 to have someone do it for the entire season. It makes more sense for me to hire someone to do this.
To calculate how much you make per hour it is a simple calculation of taking your yearly salary or what you would make on average if you are making production. You then take the amount of average time you spend per hour working and divide that.
For example:
Let’s say we are making 250,000 per year. We work a schedule that is 7 Days on 7 days off. That is 182 days per year that we are working and we work 8-hour shifts. (250000/182=1373) That is $1373 per shift. (1373/8=171) Divide this by 8 hours because that is how much time we spend working per day. So per hour this example is $171 per hour.
Based on these simple calculations you can decide if a job is worth taking as hospitals and Clinics will generally try to give you the average pay and try to minimize how much they give you to cut the cost. It is in their best interest to keep you as low-paid as possible so that they can still earn revenue and keep whatever they can.It is important when you are interviewing for a position to ask generally how long people are working and whatever area this is that will help you calculate what they are paying per hour for that position. You may also want to include the amount of call time and other activities you would spend doing that activity.
For example:
One job is compensating at $150 per hour and a different job is compensating at $180 per hour. You may be able to use this as leverage for the first opportunity if you communicate with them that another program nearby is paying a higher rate for your services. You should always try to maximize what you were being compensated per hour because again your time is finite. In this example you should probably take the higher-paying position unless they’re willing to match or exceed the other offer.
Some clinics and hospitals will attempt to coerce you into whatever their compensation model is. There are various different types of compensation models one is contractor type work which is essentially a 1099 tax contractor position which is an independent non-employee. You are a private entity and that scenario and should be able to do whatever you want within reason granted it is not illegal. This will come with certain tax benefits and other scenarios that you need to be aware of which will be the topic of a different article. Other compensation models include salary-based which is the most simplistic to calculate. Another model is the production type model which could be a per-patient rate or based on RVU. RVUs were created to calculate work that is being done by physicians primarily in procedure type positions. These numbers come from the CPT codes that are used for billing on medical documentation. The medical documentation supports the billing.
More about the rvu compensation model:
This makes it much more complicated to calculate the per hour rate. The reason this makes it more complicated is because they have a certain cutoff threshold to earn a certain level of compensation and then usually there is some additional compensation on top of that after that level is reached. Essentially the more patients and more work you do the more money you earn.
For example:
A hospital is compensating $250,000 per year at 3000 RVUs + $45 per rvu after 3,000. we calculate the per hour rate in this example by first asking how much time people generally spending at the hospital doing this type of work. Let’s say they are doing 8 hour shifts you have 12 weeks PTO and the average patient load is 10 (2 new patients and 8 follow-ups). If you did not work weekends you would work 201 days per year. Each new patient is about 3 rvus each follow up is 2 rvus. (201x22rvus per day= 4422rvus per year) You would work 201 days and make 22 rvus per day which would equal 4422 rvus per year. You would then take this number and subtract 3000 from it (4422-3000=1422rvus extra). You have 1422 additional rvus that you would be paid an extra $45 per rvu. The average yearly salary of this position would be you made the cut off of 3000 rvus and therefore gets the 250,000 plus the additional that you earned (250000+ 63990=313990). The total compensation that you would earn would be $313,990 per year. Then you take this number and divide it by how much time you would be spending (201×8=1608 hours per year). (313990/1608) This would be $195 per hour in this example.
In the above examples the higher-paying position per hour is the second position in the example that I gave last; however you have less time off in that example.If you have some independent contract work or something else does paying a higher rate than the $195 per hour that is described then it might be for their calculations to see if you should actually take that position or if you should keep the 7 on 7 off schedule.
For example:
Say in the 7 on 7 off model this allows you to moonlight or do some other type of side business activity that you earn $250 per hour doing. If you work three days doing this on your off week for 8 hours that would be a total compensation of (624hours per year) $156000 plus $250000 which would equal $406,000 per year. Even if I included high taxation you’ll probably still earn more money this way. Say you were taxed at 25% this would equal a loss of $39,000. It would still be getting $367,000 per year.
As you can see it is important to monetize your time effectively so that you can make a logical decision about your work-life balance. Please feel free to check out my other articles if you find this beneficial.