How Can I Calculate My Total Personal Benefit?

[billinchina]

Lately, I've been getting more analytical about things that I spend my time on. I've been prioritizing projects based on their present value. However, I am noticing that not all money is created equal. For instance, let's say that I was to earn $100 to try various flavors of ice cream, I'd rather do that then get paid $200 to sit around and get stung by bees for the same amount of time.

What I really need to do is value my opportunities in life based on a present value which isn't a monetary amount. I need to consider enjoyment (perhaps maslow's hierarchy of needs) and come up with some formula which can give me a percentage value which I can multiply the monetary amount by to calculate the true personal present value if I take the opportunity. Is there some kind of resource out there on the web which deals with identifying the total value of an opportunity, considering all aspects of benefit (not just money)? If not, can you help me come up with one?

 

[Lord]

this is hard, but, you shouldn't live life by a formula.

but, in thinking economics, you shouldn't always think about present value. you should also think about future value, economic profit (is it worth your time? - what does it do?)

if you enjoy it, and are paid to do it, excellent, but make sure you consider the risks to your health or anything along those sorts. there really isn't some set formula that you should use to follow it, but, i think if you can come up with what you think you are worth per hour, and see if you get paid more than that to do the job, then take it.

 

[-NC-]

Great post Bill. I couldn't easily find anything definitive on the web.
My attempt to contribute:

As I understand it, what it boils down to is measurement of enjoyment or happiness ( so that it can be graphed / compared to money ).

This is a very slippery customer to measure. What makes you happy today, may not tomorrow, even worse, you may find that what you *think might* make you happy might in fact, not.

To borrow your hypotheticals:
After tasting ice cream for 5 years straight you may decide that getting stung by bees would at least be a change!
(me, I couldn't taste ice cream for even 8 hours straight, I'd feel sick )

So I would say that the theory / equation also needs to include "max length of time an activity will stay enjoyable for", or perhaps "max frequency of activity before loss of enjoyment".

 

[Mike]

Bill, this may steer you in a bit of a different direction, but maybe it's worth a read. http://freemind.sourceforge.net/wiki/index.php/Main_Page
It's a tool called FreeMind - mind mapping software. While i'm using it mainly for business concepts, to arrange their logical flow, you might find this useful in the dissection of ideas, priorities, goals, dreams, etc.

You can still apply just about any formula, from time-money to ROI, but in much more detail since you've used the software to really drill down into details. Just don't forget to reverse the process once you're done dissecting, so arrive at the bigger picture again and start doing

IB

 

[champ_rock]

You talk like a pure economist

Just one reference http://en.wikipedia.org/wiki/Indifference_curve . everybody's Utility derived is different. for example, i might consider earning 200$ in a risky job more satisfying than someone earning 100$ from an easy job or vice versa

So any formula, will have to be based on one person and cannot be generalised

 

[billinchina]

Thanks for the posts. What I ended up doing is rating the 5 needs in Maslow's Hierarchy of Needs and then multiplying each of those ratings by a certain weight that I feel it should deserve based on my likes and dislikes. Then, I divided by the total number of possible points to come up with a percent. I calculated one value for my wage rate which I currently receive. Then, I calculated one for a set of similar opportunities I am considering. I think in theory, I could put 50 opportunities in a spreadsheet and sort by the present value (which now takes into consideration all needs) in descending order and then work my way on down the list.

I don't plan to live my life by a formula and I'm very spontaneous. I'm one of those guys that likes to dabble in things. If I like it I do it. So, hopefully this can help me focus on the things that benefit the most, first.