Originally published in October 2007, I continue to outsource these things and have a strong desire to outsource more.  I’ll have a future post on my future outsourcing plans. 

I outsource many things in my life and I have strong rationale for doing so, it saves me the most valuable commodity out there: time! Here’s are the five main things I outsource in my life, how much they cost and what the return on investment means to me.

1. Lawn Service

When we purchased our first home, we looked forward to taking care of our lawn ourselves so we set out to Home Depot and proceeded to buy a lawn mower, edger, weed whacker, rakes, and a bunch of other stuff that we hardly used. We maintained our lawn for the first 6 months then opted to contract a company to do the work. It would take us about 3 hours mowing the lawn, edging the sidewalks, raking up grass and leaves and finally bagging it all. It takes a team of 3 guys with industrial sized equipment about 30 minutes to do the same amount of work.

Monetary cost to me: $28/week, Time saved: 3 hours/week.

2. Dry Cleaning

I wear dress shirts for work and I’ve always had them dry cleaned. When I got married, my wife decided to “save” some money so she laundered and ironed the shirts herself. After two tries and several hours spent slaving over a hot iron, she decided dry cleaning was a much better option. The dry cleaners have industrial/commercial equipment to clean, press, starch and hang clothes much faster than we could ever do it.

Monetary cost to me: $50/week, Time Saved: 2 hours /week

3. House Cleaning

With kids in the house, it is generally impossible to keep a clean house. With my wife and I working two full time jobs, getting home to clean up is the last thing on our minds. We hired a person to come in and clean the house every week and it takes her approximately 3 hours to mop all floors, clean all bathrooms, wash dishes, clean the kids rooms, vacuum carpet, dust, wash sheets, plus various other things.

Cost to me: $75/week, Time Saved: 3 hours /week

4. Dining

There was a great McDonalds Double Cheeseburger Debate over at The Simple Dollar followed up by Lazy Man and Money with his own take on it but I’m firmly in the belief that dining out can be cheaper than cooking yourself. I will concede that cooking at home is probably much healthier and the quality of food is better since you’re buying your own ingredients but that’s the trade off. We usually dine out at least 3 times per week. I guesstimate that the average cost of the meals is about $30 total. The upside is time saved from preparing ingredients (chopping, dicing, meading, etc), cooking on pots and pans or grill/oven, then washing all the dishes, pots & pans, etc. I estimate saving 2 hours of time by simply driving through KFC or ordering a couple of pizza’s and eating them vs. cooking at home.

Cost to me: $90/week, Time saved: 6 hours/week

5. Auto Maintenance

Oil changes, car detailing, tire rotation, car washes, and other routine auto maintenance is yet another thing that I outsource. It is too time consuming to head out to the auto parts store to pick up oil filters, oil, etc., drive back home and spend an hour changing the oil and other fluids in the car (wiper wash, brake fluid, etc). Although I do occasionally wash my own car, it is a rare event.

Cost to me: $50/month, Time saved: 1.5 hours/month

So let’s take a closer look at the cost/time ratio here.

I spend a total of about $255.55/week which saves me about 14.4 hours/week so this rougly translates to $17.78/hour. The opportunity cost is defined as the cost of something in terms of an opportunity forgone. What does that mean? It means that if you’re mowing your lawn, you’re losing out on doing something else. The hours spent mowing your lawn will NEVER come back, they are gone FOREVER. So does $17.78/hour sound expensive? This amount of money roughly translates to about 37k/year so if you earn this amount or less you might be better off doing these things yourself.

What are some of the things that I’d rather be doing than mowing the lawn or ironing my shirts? The top three opportunities for me breakdown into three components:

1. Research – I spend a great deal of time doing research on ETFs, commodities, currencies, stocks, bonds, global interest rates, and general news amongst other things. I read about 1.5/hours per day which eats up about 1/2 of my opportunity cost time.

2. PFBlogging – My websites takes time. Each posts takes time to research, write, and ultimately post. I usually skip the “proof read” part because it eats into some of my research time. This eats up at least 1 hour per day but it is worth it. I’ve written about my personal philosophy when it comes to charity and tithing, I’d rather teach a man to fish than give a man a fish.

3. ETF-Cashinator – I spent considerable time developing this little application. I’m not a programmer by trade so I hacked this application together from snippets of code I found all over the place. I’ve now “rebuilt” this app a few times and I’ve added some significant enhancements to track energy and currencies along with incorporating some global information into one system such as global interest rates. I’ll eventually plan to add some indicators (stochastic, RSI, 200 MDA, etc) but the programming is getting so complex that I’ll likely outsource the development to someone overseas. I do spend some time on the mathematics behind the formulas that make it all happen. So far this application has helped me generate $16,000 in profit which I couldn’t have made if I had been ironing shirts, mowing my lawn and changing the oil of my cars.

This goes back to the whole capitalism vs. frugalism debate I wrote about earlier. You can spend time learning for earning or scraping for saving. I choose to earn.