I spent a majority of yesterday in an automobile on a trek to see a fellow Smarty Pants member perform. A Mr. Dave Powell is currently in the grad program at Second City Detroit and he was performing in Detroit yesterday, so a few of us decided to go up and see him.
The show was excellent – very funny and thought provoking – so props to the cast/writers.
There’s a Reason It’s Called Spending Time
There’s something about spending 10+ hours in a car for just over 1 hour of entertainment that really makes you think about the cost of such a trip.
Sure there were the actual expenses (gas, admission, food – all totaling about $30), but then there’s the even bigger one – opportunity cost. For those of you unfamiliar with the phrase, opportunity cost is the “price” you pay for not being able to do something else because of what you choose to do.
Though the phrase is often used in business scenarios, it can (and should) be applied in a personal sense. So in this case, the opportunity cost was spending 10 hours in a car when I could have been working on my website, writing stand-up, watching football, etc.
The Price of DIY
It’s unfortunate that most people never consider such a cost when making their decisions. There are plenty of Do-It-Yourselfers who assume that by doing something themselves, they’re saving money. And while you’ll almost always save in actual ca$h, what about the costs for spending so much time on a project?
Let’s say you want to renovate your basement. You have a contractor come in, and he gives you an estimate for $10,000 (I have no idea if this is close). He also tells you it will take 100 hours to do (again, no idea how accurate that is).
Now you think to yourself, $10,000 is a lot of money, I could do that cheaper. So you make a list of everything you’ll need, and you find that materials will only cost $5,000. You can save 5 grand by DIY! But not so fast.
If you are to do it yourself, then surely it’s going to consume a lot of your time. And unless you know exactly what you are doing, and can match the efficiency of how many ever people the contractor was going to hire, you are going to do it slower (now that I’m sure of).
So instead of 100 hours, it takes you 500 to complete.
In the example above, the opportunity cost of going with the contractor is the extra $5,000 you pay that you could spend on something else. The cost for DIY is 500 hours (less the “overhead” time of you working with the contractor) that you are now spending redoing your basement instead of something else (working more, spending time with the family, sleeping).
Time vs Money with a Splash of Enjoyment
So which option do you go with? Well that depends. How much do you think your time is worth? (This is not necessarily the same as your hourly wage where you work, but that could be a start.)
If you’re busy, don’t really like doing construction, and feel it’s worth more than $10/hour, then the contractor is the better option. However, if you’ve got some spare time, really enjoy hands-on projects and value your time at less than $10/hour, then DIY is the way to go. Why the magic number of $10/hour? $5,000 (opportunity cost of option A)/500 (opportunity cost of option B) = $10.
The Cost of the Trip
So, was seeing the show worth $30 plus 10+ hours in a car? Without a doubt, yes.
Even though it may have easily cost me hundreds of opportunity cost dollars (I think highly of my time – modest, I know…), I would do it again in a heartbeat.
The value of supporting a fellow cast member, seeing a hilarious show, further studying my craft, bonding more with other group members, and getting to say I’ve been to Detroit (ok, this might be more of a cost), was well worth the “price of admission.”
