Being paid by the hour is the worst form of compensation.

As Tim Denning so aptly put in his article, the most basic way of making money through a typical job, aka through being paid by the hour, is the worst form of compensation.

This is not a diss at anyone who chooses to live getting paid by the hour. In fact, this is pretty much how most people start making money — by working a job that pays by the hour.

If this is a choice of compensation you’re willing to stick with for the rest of your life, then more power to you. I can’t argue with that.

But here’s why I firmly believe and agree with Tim that this is the worst form of compensation.

The form of compensation that takes away your most precious resource the most is the worst form.

Your most precious resource is time.

Getting paid by the hour is the form of compensation that takes away most of your time.

You get paid some dollars here and there for one hour of your life that you never get back, and for what? To flip burgers? To sit at a desk and answer calls, set appointments? To stock items on a shelf?

I’m not mocking the kind of work anybody does. I have, however, woken up to the unfairness that is getting paid by the hour. Your time is worth so much more than standing at a corner on the street pointing a sign to a store to drive traffic.

Money comes and goes. Your time doesn’t.

Some people work really hard over long hours and don’t reap much from it.

I’d recommend eventually choosing a path that’s more efficient and more worth your time, such as getting paid for your expertise, your results, or your creations.

Another thing to think about is leverage. I’m going to quote Tim one more time:

The goal is you want to do one task per day that compounds. When leverage multiplies your inputs, it makes your outputs look incredible.
Image credit-Jack Butcher via Twitter

The left side of the image is what getting paid by the hour looks like.
The right side is what leverage looks like.

If you want to escape the monotony of being a slave to a wage, work smarter, not harder. Find ways to get more done in less time. Do tasks that compound your outputs over time. Don’t stick with the “paid by the hour” model for too long.

Let’s take a step back.

I wanna backtrack a little bit because there’s something that I didn’t address which I think is important.

If you thoroughly enjoy a job that pays you by the hour, I’m not here to rain on your parade.

If that’s what brings you genuine fulfillment, then keep on doing your thing. You’re spending your time wisely, I’d say.

What I’m saying is more for the people who work jobs where they get paid by the hour and they’re not being fulfilled by it. In which case, the wage is definitely poisonous because you’re losing your most precious resource to a job you don’t like and you’re not being fulfilled.

There’s a difference between someone who flips burgers and loves doing it and wants to do it for the rest of their life, vs. someone who flips burgers, hates doing it, would rather be starting up a car company, but never pulls up their pants to take the steps to get started.

Like I said, one is spending their time wisely, even if they’re paying their hours in exchange for dollars, while the other is living in dissatisfaction with bottled-up potential.

Where I’m coming from

I’m not here to sound like some cliche internet entrepreneur guru because that’s not who I am, nor do I claim to be some entrepreneurial expert.

I’m just a guy who’s been living life paid by the hour, who’s trying to do something different with his life, to pursue something that he actually cares about and wants to do with his time.

And with me starting up my writing career again, I’m practicing what I preach. My goal is to live entirely off my writing income in 3–5 years.

I just don’t want to see people settle or fall for the life where they live on a wage when they could be doing something better with their time, when they also want to be doing something else with their time.

Find a way to build towards something that can help you earn a living without taking up so much of the time you have.

With all due respect to those who lived like this and those who came before me, it’s not a good use of your time to work yourself to the bone your whole life just so you can sustain yourself. There should be more to your life than clocking in and out 5 days a week.

I’m just encouraging people to find ways to work smarter and not harder, so that their lives can be more vibrant and memorable. More to their liking.

More free.