Hours 38 to 40: Profit And Your Personal Finances

Once upon a time, when I was working with a consulting company that billed its customers hourly for their time, its CTO offered up an amazing perspective on profitability for its team of consultants during a team meeting. He explained that when it came to generating profit to put back into the business and to fund increases in employee compensation and benefits, the company’s consultants needed to keep in mind that while the company leadership appreciated everyone’s hard work, it was important to ensure that they billed a full 40 hours a week because all of the company’s profit projections were based on a 40-hour billable week.

He went on to explain, approximately of course, that it was hours 1 to 37 for each week that covered the cost of the expenses, but it was hours 38, 39, and 40 that yielded the profits the leadership put back into the business, and for that reason, while consultants might feel that billing close to 40 hours a week was close enough, it was, in fact, actually not.

This lesson in hourly billing and profitability not only resonated with me when I heard it, but still does to this day, because it makes me think of the very same concept as it applies to personal finances as well. While most people would never look at it this way, their personal finances are very similar to the financial models this consulting business and its CTO were addressing that day.

Much like this consulting business, and any business for that matter, each of us as individuals also have expenses that when deducted from our income, yield either a profit or a loss. If you get paid hourly and only work 37 hours per week, but your expenses take up your full amount of pay, which you anticipated being for 40 hours per week, you actually are going to bring in less money than you need to cover your expenses. While this comparison is quite literal, the same holds true for however you are paid, be it hourly, salary, in lump sums as a consultant, or any other way.

The bottom line is that you should always know exactly what your expenses are and should always ensure that your income never falls below the amount of those expenses no matter what you do. In fact, you should always strive to ensure your expenses are as small of a percentage of your income as possible. You should view the difference between your expenses and your income as your profit, and without profit, you cannot reinvest in the things in life that you enjoy and that are important to you and your loved ones.

Your personal profits are the money you use to pay for things like vacations, education, luxuries, or whatever other experiences or items you and your loved ones enjoy. By looking at this money left over after paying your expenses as profit, you can very easily identify and dedicate your efforts in ways that increase that profit.

So, the next time you feel 37 hours is close enough, or spending just a little more than you earn is no big deal, remember that without profits, you will have nothing to reinvest in your life, and what is the point of all of that hard work if all you ever do is just cover your expenses or dig yourself deeper into debt?

Photo by Meditations via Pixabay

Don't Be A Rhino At Work

Are you a rhino at work? Do your coworkers reference bulls and china shops in the same sentence when they describe what it is like to work with you?

Now, when I say rhino, I’m not talking about you physically storming through the halls, leaving twisted and mangled bodies in your wake, but I am talking about how you treat and speak to the people with whom you work.

Granted, some of us are more soft spoken, or out spoken, than others, and some of us are more imposing, or less imposing, but I am specifically talking about those individuals who time and time again end up rubbing their coworkers the wrong way and leave the rest of us marveling at what they just said, how they just handled a given situation, and more so, at how they just do not recognize the intimidation, uneasiness, and generally unwelcome environment that circles around them as they storm through the office.

The best way to tell if you are a rhino at work is to listen to yourself when engaged in conversation with your colleagues, your bosses, and your subordinates. There should not be stark differences in the tone and intensity of your conversations between the three. The same voice and tone you use for your bosses is the same voice and tone you should use for your colleagues and your subordinates. 

Also, look around at others in the office when you are engaged in conversation. Are people purposely looking away, looking down at their desks, or trying very hard to avoid eye contact with you? Are people shaking their heads or shifting uncomfortably in their chairs? Your office conversations should not make people who overhear them feel uncomfortable or uneasy, nor should they make people not want to work with you.

I know it can’t all be roses and sunshine at work, but your coworkers deserve to be treated fairly, reasonably, and with respect. People should not have to endure conversations that make them feel belittled or intimidated. There is just no place for this type of behavior in today’s business environment.

So, be sure to listen to yourself and take note of the reactions of those around you when you are engaged in conversation with people at work. By doing so, you can make sure that you are not your office’s rhino.

Photo by Casey Allen via Pexels