When to DIY

Episode 163 | When to DIY

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Transcript

Freeman Linde: 0:03

Hi, welcome to Retirementership. I'm your host, freeman Lindy, certified Financial Planner. Someone once asked me recently when should we DIY? When do you do it yourself versus when do you hire someone to do it for you? I'm a recovering DIYer. I used to do everything myself, from the smallest tasks to the most complex things. I enjoyed learning things. I enjoyed doing it myself. I couldn't hire anyone to do it right. So there's a whole bunch of factors that went into me DIYing almost everything and slowly, over time, getting more and more comfortable with having other people do it. So here's three maybe three things to think through when you're deciding do I do this myself when it comes to things with money or or whatever else, or do I hire someone else to do it right?

Freeman Linde: 0:59

Outsource this I think this is where it applies to personal finance and to money is that if you are not going to do it yourself, you need to hire someone to do it right. You need to outsource it to someone else, and so it becomes a financial like with everything else, there's a financial component to this. So when do you do DIY and when do you outsource it? So I think three, three rules or three principles to think through. Diy when you enjoy it more than your work, when you save money more than your hourly rate and when there's a little at stake, okay. So DIY when you enjoy it more than your work, when you save money more than your hourly rate and when there is little at stake, right. So it's just digging to each of those, right? If you enjoy doing wherever the task is at hand, and especially if you enjoy it more than your work or you enjoy it in addition to your work as a change of pace, then it's a good thing to DIY. So, for instance, I still DIY my grass cutting, right. I cut my own grass, I mow my own lawn, I shovel my own driveway. I I enjoy doing those things. I like being outside a certain amount. Right, I'm a huge outdoorsman by any means, but I like being outside. I like the exercise. I got rid of my snowblower so I could just shovel things by hand here in Wisconsin, because it's a good. It's a good workout. Doesn't make any sense to go to the gym to do a workout and then use a snowblower to blow your driveway. That doesn't make sense, right? Use a snowblower if you're no longer able to physically do it, which is fine. But so I enjoy doing those things and I don't enjoy them more than my work, because I obviously really enjoy my work. But it is a nice change of pace and so I don't outsource those things.

Freeman Linde: 2:37

I outsource pretty much everything with my car. I don't like tinkering on cars. Some people really enjoy it. They like changing the oil, they like their grease monkeys right, they like to do those things themselves. I don't, I don't enjoy working on cars at all, um, and so I outsource all of the repairs, most of the maintenance. Right, I'll change an air filter maybe here or there, um, but otherwise I outsource that to the professionals, cause I don't care for working on cars, right. And so same thing with some of the things in my work.

Freeman Linde: 3:06

Like, I used to do a lot of things in my work that I didn't enjoy and so I figure like, why am I still doing this? Outsource it to someone else who actually enjoys. There are people out there who love doing the things that you hate doing, right. Like I make I joke a lot of times with new clients. Like I make spreadsheets for fun. I enjoy that type of stuff. And so if you hate spreadsheets, if you hate looking at finance, if you hate doing the math on this. There are actually people who enjoy doing that thing and would love doing it for you.

Freeman Linde: 3:34

So if you hate doing certain things and either you just don't do them because you hate doing them or you just muscle through it because you're trying to save money and you don't want to outsource it, consider outsourcing it right, because you can always. If you hate that more than your work, you can always just go work more and then pay someone to do that, and that goes right into the next one. Right, if you save money more than your hourly rate? Right, you always save money when you DIY. That's why you DIY. You don't want to hire someone to do it because you want to save money.

Freeman Linde: 4:05

But I really do want to make sure that you look at are you saving more than your hourly rate to do it? Right? Think about how much you make per hour if you're still working, right? Or how much maybe you did make for per hour while you're working. And if you're retired? What is that hourly rate? What is your time worth? And is it worth you spending all this time, especially if you don't enjoy it, to try to do things that are below your hourly rate, right.

Freeman Linde: 4:32

So if you make $100,000 a year, you work 40 hours a week. You make 50 bucks an hour, right. And so if you hate doing tasks and you could save 80 bucks an hour, you could hire you know, if you don't want you wanna, but you make 50 bucks an hour. So even then you think that you're saving time and money, right. But it's going to take you way longer to do it than it is going to take them, right? It might take you 10 hours to do this project, and electricity is going to come in and do it in three, right. So your total hourly rate, your 50 bucks an hour times eight hours, is 400 bucks, versus paying someone else 260 bucks or 240 bucks, whatever that is to pay them 80 bucks an hour to come in and do it for three hours, right. So so think about the whole project, the whole task that you're doing. Multiply that by your hourly rate, hey, here's the actual cost for you doing it yourself versus the cost of having a professional.

Freeman Linde: 5:26

Do it much faster, right, because it's not even like a. We don't even want to make this like a, a hoity-toity. Oh, my time's worth more than your time, so I'm going to have you do it. It has nothing to do with that. It's very, very rarely are you going to be better and more efficient on an hourly basis than someone who specializes in the task that you're doing. All right. So when I outsource working on my car, it's not that my time is worth more than their time. It's that it would take me hours and hours to do the same thing that they can do in just a few minutes, because they know what they're doing, and so when it comes to that task, their time is worth more than mine. They can do it faster than me, and that's why I want them to do it Right.

Freeman Linde: 6:03

When it comes to like taxes, right. Like I've seen a lot of people that have done taxes themselves, they DIY their taxes because they don't want to spend 200 bucks or 300 bucks or 400 bucks to have a CPA do it or a tax planner or whatever else, and so they'll spend hours and hours every year doing their taxes. They don't enjoy it, so they fail on the first one. They hate it. They only do it once a year, so they never remember how to do it. And but they're trying to save money, but they don't save more money than their hourly rate right, because what takes them eight hours to do? And then they multiply that by their hourly rate. All of a sudden they realize, man, this is costing me $600 to do my own taxes. This is costing me $800 to do my own taxes. Or even if it's the same right, hey, I could hire a CPA at 300, or I could do it and it'd be $300 my own time. But I hate it.

Freeman Linde: 6:47

Outsource it, even if it costs more to outsource it. If you hate it enough, still outsource it, right. So if you're not actually saving money, if you actually do the math on the tasks that you're looking at versus outsourcing and how long it would take a professional to do it, because that CPA, that tax planner, could probably do the same thing in a couple hours instead of the eight hours it takes you to do it. Again, it's not that your time is worth more than their time or that you're more valuable than they are in any way like that. It's just people who specialize can do it better than those who don't. Right?

Freeman Linde: 7:17

If I didn't enjoy mowing my lawn, I would outsource it, not because my time is worth more than a lawn keepers, but because they have tons of great equipment that makes them really fast and efficient, and they can mow my lawn way faster and take care of all my landscaping way faster than I could. So if I I didn't enjoy that, I would outsource that in a heartbeat. And there's nothing there about being better than someone or your time being more valuable than theirs. That's just what specialization is right. It's a beautiful thing when people get really really good at the things they do. They have resources that the average person doesn't have because they do it for multiple people, and it's just. It's great.

Freeman Linde: 7:50

So if you save money more than your hourly rate, you can do it yourself, and especially if you enjoy it, then those are two good ingredients for doing it yourself. If you don't have those things, then why are you doing it yourself? If you don't enjoy it and you're not saving money, then of course there's no reason to do this. And then the last piece would be right is there a little at stake? Right, there's not much at stake for changing the oil in my car. I mean, car could die if you don't do it right, but like you can't mess it up, really, it's pretty easy to do. There's very little at stake. I could do that myself, but again, I don't enjoy it and so I outsource it.

Freeman Linde: 8:24

Um, there's little at stake with mowing my lawn, it doesn't? You know, if I, if I, mess it up, it's not gonna look perfect, but the grass will grow back and you can try it again in a week. So there's not very much at stake there. And so I will. I will mow my own lawn, I will shovel my own driveway, I will do these things that I enjoy doing, because there's just not much at stake. But I'm not going to perform my own lasik surgery, I'm not going to perform medical practices on myself, because there's just much more at stake there. Right, and obviously you know I'm biased, but I see that there's a lot at stake with finances, with financial planning, with taxes, with long-term investments, with behavioral investing, all these things. There's a ton at stake. There's tens of thousands, hundreds of thousands, perhaps even millions of dollars on the line if we mess this up.

Freeman Linde: 9:20

And so that's where, again, even if you enjoy it, even if you feel like you're saving money by not outsourcing something, is there enough at stake where, if you mess it up by doing it wrong, it still pays to have the professional come in and do it right. If you're running a business, does it still pay to have a consultant come in and double check things, make sure there isn't anything better you could be doing? Because your, your business, your your employees lives all these things are at stake. There's a lot at stake in getting business right. There's a lot at stake in getting your personal finance right. There's a lot at stake in getting your medical procedures done correctly, and so if there's a little at stake, you can do it yourself. But if there's a little at stake, you can do it yourself. But if there's a lot at stake, consider outsourcing that, even if you can save money and even if you enjoy doing it yourself. That would be that third kind of caveat, third principle to follow when you decide if you do it yourself or if you should outsource it to professional.

Freeman Linde: 10:11

So again, I love DIYing it. I do a lot of things myself when I enjoy it, for a change of pace over my normal work. But I, as a recovering DIYer, am learning that there are some times when someone else is so much better at doing something that I should just stop trying to do it myself. Go do more of what I do and what I'm really good at and what I can have the biggest impact in my life with, and then hiring, someone else to do that for me, and so maybe there are a few things in your life that you've been doing yourself that it's time to outsource, and, whether that's financial planning or whether you already have you already be a client with me you've already outsourced that.

Freeman Linde: 10:48

What's that next thing that we can outsource? Should you outsource cleaning your, your house? Should you just go do more work in the work that you do and then hire out some of the things that you hate doing at home because they're better at it? Not because your time is worth more than a house cleaner, but because they're better and faster at it and they have equipment you don't have, and that's what they do. And you can spend more time, spend a little bit more time working so you can pay for that and then have all that time of not cleaning to be able to go enjoy with your family and the other things. Right, things like that.

Freeman Linde: 11:18

What are things in your life that you are still trying to diy, that you'd be better off just working more in what you love to do and hiring out the things that you don't like, that you're not necessarily good at or if there's a lot at stake. So some things to think over. Think about a couple, maybe one, what's one or two things that you can start DIYing this year and specialize more in the things that you love to do and that you're really good at, and get rid of some of the things that you hate to do or you're not really good at. Food for thought. Hope you enjoyed that. Have a great week and we'll see you next week. Cheers.