What if you have a J-O-B?

In my last 2 Dailies, I talked about your effective hourly rate (EHR) and how to increase it. But…

What if you have a job?

I get it. I do have a lot of subscribers who have a day job and are looking at building an online business as a ticket out. And it can seem like a catch-22.

It is one of the biggest reasons why I’m not a fan of a J-O-B. It isn’t because being employed sucks. It doesn’t. It comes with a certain degree of security and I get that. But, it DOES mean that you’re usually not in control of your time.

In the end, your EHR will usually be low when you’re employed because that’s how the company makes a profit. Typically, you’re there to enable a higher EHR for the company owners. So, this isn’t a bad thing. It is how the economy works, really. But…

We’re talking lifestyle design here. So, in this case, it is only your EHR which matters. And when they control your schedule and your pay rate is pre-defined, your EHR is pretty stuck.

First of all, if you’re employed, what IS your effective hourly rate? If you get paid per hour, you already know. If you’re on salary, you should calculate it. By knowing that baseline EHR, you can then set a target for your new (or growing) online business.

Let’s say you work 40 hours per week in a day job and have a salary of $50k per year. Now, you’ll have taxes to pay. I am not an accountant and I have no desire AT ALL to look at tax rates right now. 🙂 But, let’s assume you will pay 15% in taxes. Take home pay would be $42,500. Average monthly would then be $3,541. At 160 work hours per month (full-time), your effective hourly rate works out to $22.13.

EHR of $22.13/hour becomes your target.

By concentrating on the RIGHT things with regard to the creation of your online business, you then need to get your EHR up to at least $22.13/hour in order to fire your boss. $22.13/hour becomes your job replacement figure.

Now, I understand that making that transition can be hard. With that day job sucking much of your time, you’re only left with a pretty limited window to work on that online business. Getting up to an EHR of $22.13 might seem impossible.

But, by concentrating on the right things (not working hard, but working smart), you will begin to generate revenue. You’re making good offers and people begin to buy. The revenue alone could turn into “quit your job” income or it might not. But…

There may come a time when you have to make some estimates. IF your schedule freed up for that day job and you could dedicate your full attention to the online business, how quick could you get the EHR up to your baseline?

Point here is… the EHR makes a good metric… a good target.. for firing your boss and taking control of your time via your own business. It turns this transition into a specific target, not a gut feeling. If you lead only by gut feeling, then it is much harder to make the transition from full-time employment.

The EHR of a day job is both good news and bad news.

The bad news, first, is that the EHR of most day jobs is rather low.

The good news, though, is that that makes the new EHR of your replacement gig easier to attain.

Like I said yesterday, though, it will ONLY be attained by concentrating on the right things. Concentrating on that offer and finding the right offer. An offer, too, that leverages your time and doesn’t artificially cap your new EHR. This is one reason why I’m not a fan of charging hourly, even if you’re in business for yourself. It places an artificial cap on your EHR.

So, if you’re reading this right now and you have a day job, but are looking to potentially transition out of it with an online business… do this…

Calculate your effective hourly rate from your job. Your EHR.

If you want, reply back and tell me what it is.

This becomes a target for us to hit. This is your job replacement metric. Then we can take it from there. 🙂

Have an awesome weekend, my friends. 🙂

– David