RE: Consulting for Dollars... or Chump Change?

Dan Kohn (
Sat, 6 Sep 1997 23:55:05 -0700

Quick rules of thumb:

1) $80 an hour at a full-time job equates to $160K a year annual salary.
(This is based on 40 hour week times 50 week year, but is still a good
rule of thumb.)

2) Consultants, on average, spend 1/3rd of their time looking for work,
so they need to charge 3 times more than if they were employed full-time
doing the same thing. ($80 an hour as a consultant equates to $27 as a
wage worker.)

So, it may be helpful to think of whether you'd take a job with a $53K
annual salary. But, don't forget the externalities:

a) Some people enjoy the work they do, meaning that work constitutes
consumption as well as investment, and complicating the labor-leisure
tradeoff calculation. (I consider myself extremely lucky to be in this

b) Potential positive externality: doing this work may get you
additional jobs with this company or others.

c) Potential negative externality: if others hear about this job, they
may no longer be willing to pay you more.

But, finally, I think the best analysis is based opportunity cost. What
else would you be doing with your time? Do you *want* to do the work?

Although I'm a fairly rational person, I think the important decisions
should be made by gut feel.

- dan

Daniel Kohn <>
Teledesic Corporation     PGP KeyID: 0x6129DD6D
+1-425-602-6222 (voice)   602-0002 (fax)

> -----Original Message----- > From: I Find Karma [] > Sent: Wednesday, August 27, 1997 10:41 PM > To: > Subject: Consulting for Dollars... or Chump Change? > > So someone earlier this week offered me a consulting job at 80 bucks > an > hour (pretax). > > And more than one friend I've talked to since has said that that offer > was "Chump Change" -- that is, the person who made the offer to me > shows > me that he thinks I'm a chump by lowballing me with such an inadequate > offering of what he thinks my time is worth. > > Any of you overopininated folks agree or disagree with my friends' > "Chump Change" hypothesis? You can respond to me personally if you > don't want your opinions archived (with sour grapes)... > > ---- > > > ObBits: 166 book titles (printed, produced, and distributed) came out > in > America EACH DAY IN 1996 (60,000 titles in the whole year).