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On the surface, the concept of trading time for money seems like a fair deal.
You put in a certain amount of time, and you get an equal amount of monetary compensation in return.
Unfortunately, it’s not that simple. In fact, this concept is total BS.
I figured this out at my first job after college, when I worked as a writer in a marketing agency.
Not to brag, but I’m a very fast typer, and I figured that this skill would serve me well at my new job. But I quickly realized my speedy fingers and rapid article turnaround didn’t translate to more money in my pocket. Instead, it just meant more articles piled onto my plate.
Meanwhile, my colleagues who pecked at their keyboards like nervous chickens and turned in half as much work kept the same pay rate as me.
This experience was the first crack in the facade, when I began to realize that time and money could not be exchanged as equals.
What was happening to me at that job was happening to many people in the workforce, at a much larger scale. As you can see in this chart from the Economic Policy Institute, as new technology has made the workforce more productive than ever, wages have remained comparatively stagnant.
Hourly wages make sense in some cases, but if wages aren’t increasing over time, then it’s employers who are benefiting over workers.
I spent years fighting to escape the trap of trading time for money, but you don’t have to wait that long. You can start now, using the methods in this article.
Rethinking the value of money and time
The first step to escaping the time-money tradeoff is to shift your own mindset.
There are a few preconceived notions about the value of time and money that you have probably picked up from teachers, family members, and the media. Let’s break them down:
The illusion of monetary stability
It would be nice if a dollar were always worth a dollar. But that’s not how money works.
The value of money is constantly shifting due to various economic factors. Inflation, supply and demand, and global events all play a role in determining what your hard-earned cash can actually buy.
This is why everything is so expensive these days—because the cost of living has increased while wages have remained stagnant.
The clearest example of this is the housing market. According to Consumer Affairs, when adjusting for inflation, Gen Z is paying nearly 100% more on average for housing than baby boomers did when they were younger.
Managing money changes its value
How you treat the money you earn also changes its value. This is why budgeting is so important—it helps you understand exactly where every dollar is going, so you can ensure you’re putting it toward the things that matter most to you in life.
Spending frivolously can be fun, but it also decreases the value of your money. You can easily spend $100 on crappy over-priced lunches in a work week, or you can take your best friend out for a nice dinner on Friday night for the same cost. The value of a fun and memorable dinner with your friend is certainly higher than a few forgettable meals, despite the equal monetary cost.
Want to get better at managing your money? Check out our full guide on how to make money in college, and download our free budgeting template for college students:
Maximizing your time
Just like budgeting helps you get the most out of your money, effective time management can help you maximize this precious resource.
Not to get too dark, but to understand the value of time, you have to accept that it is limited. We only get a certain amount of waking hours in a lifetime.
There’s no way to know how much time you’ll get in the end, but there are steps you can take to make sure the time you do have brings you as much pleasure and prosperity as possible.
We have lots of resources to help you maximize your time and use the extra hours to find satisfaction:
Breaking free: Alternative ways to earn
Now that we’ve established why trading time for money isn’t ideal, let’s explore some alternatives. These methods can help you maximize your earning potential while giving you more control over your time.
Commission-based work: Reward for a job well done
Commission-based work, which typically happens in the sales arena, is an excellent first step away from the hourly wage model. Instead of getting paid for your time, you’re compensated based on your results. This approach rewards efficiency and can lead to higher earnings if you’re skilled at what you do.
Here’s a simple example: Imagine you’re in sales and you close a significant deal in just a few hours. In a typical job, you’d get paid the same whether it took you a day or a week. But with commission, that quick sale could result in a substantial bonus, potentially far exceeding what you’d make in the same time on an hourly wage.
Of course, commission work isn’t without its challenges. Your income can be less predictable, and there’s often more pressure to perform. However, it teaches you to value your output, not just your time. You learn to work efficiently and focus on results, skills that are valuable in any career path.
Direct sales, like what we do here at Vector Marketing, is a classic example of commission-based work (though we also offer a base pay). While it’s not for everyone, it can be an excellent opportunity for the right person to develop crucial skills while earning based on effort rather than time. You’ll hone your persuasion techniques, and pick up a whole bunch of other sales-related life skills.
If the idea of a career in sales interests you, check out these other resources:
Project-based work: Charging for results, not time
Project-based work is the most common method I use for charging my freelance clients. Instead of billing for every hour spent or word written, I set a single project free up front and charge for 50% of it when I begin, and collect the remaining 50% when I finish.
To make this work, you have to accurately estimate how long it takes you to complete any given project. I recommend using a free timer, like this one from Toggl, if you’re just starting out.
One of the best parts about project-based work is that it encourages you to develop processes that make you more efficient over time. The more projects you complete, the better you get at estimating and the faster you can work on similar projects in the future. If you can complete the project faster than estimated, you essentially increase your hourly rate.
Project-based work is particularly well-suited for freelancers and those working within agencies. It’s common in fields like writing, graphic design, web development, and consulting.
If you’re interested in exploring project-based work or other alternative career paths, check out these resources:
Retainer-based work: Stability meets flexibility
While project-based work is my most common method, retainer agreements are my favorite because they offer a sweet spot between stability and flexibility.
Clients on retainers pay you an agreed-upon sum, typically on a monthly basis. This guaranteed income helps smooth out the feast-or-famine cycles that many freelancers experience. If you’re tired of the rollercoaster ride of inconsistent income, retainers can be your ticket to more predictable cash flow.
The beauty of retainers is that they can be scaled up or down without canceling the entire contract, giving both you and your client some wiggle room as needs change.
The downside of retainers is that they can be a very tough sell. They require a bigger commitment from the client, which means you need to clearly demonstrate your value.
When pitching a retainer, it’s crucial to lay out exactly what the client will get in clear, specific terms. This serves two purposes:
1. It helps the client understand the value they’re getting for their money.
2. It protects you from “scope creep”—when a client keeps asking for “just one more thing” until you’re doing way more work than you agreed to.
Retainers work well for ongoing services like content creation, social media management, website maintenance, or consulting. They’re ideal if you have clients who need regular work done but don’t want to hire a full-time employee.
Single-service businesses: Quick cash without a long-term commitment
If you’re a college student or recent graduate looking to make money without getting tied down to a traditional job, single-service businesses might be your ticket. These are one-off jobs that give you a quick payment without locking you into a long-term contract.
Here’s a list of popular single-service jobs that are perfect for students and young professionals:
- Tutoring
- Pet-sitting or dog-walking
- House cleaning
- Lawn care and landscaping
- Snow removal
- Art commissions
- Event photography
- Graphic design for small businesses
- Babysitting
- Junk removal
- Personal shopping or errand running
- Car detailing
The best part about these jobs is their flexibility. You can take on as much or as little work as you want, depending on your schedule and financial needs.
When setting up your single-service business, pricing is crucial. You want to be competitive enough to attract customers, but also ensure you’re being fairly compensated for your time and skills. Research what others in your area are charging for similar services, and don’t be afraid to adjust your rates as you gain experience and build a reputation.
Here are more resources that explain how to get started with these jobs:
Breaking free from trading time for money opens up a world of possibilities for your career and financial future. With these resources and frameworks, you can break free from the myth of trading time for money.