Dear Ed

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dearedDear Ned

My friend says that if you multiply your hourly rate by 1000, it tells you how much you will earn in a year. Is this a predictive fantasy? How does it work?

Glen Fiddich

 

Dear Glen

Do I know you from somewhere? Your name has a certain familiarity to it. No? Okay, to work, then. For starters, don't let anyone tell you that maths doesn't come in handy. You may not ever need anything beyond primary-level maths but, boy, do you need it!

Let's go for some nice round numbers. Let's say your hourly rate is $80. If the theory is right, that should give you an annual gross income of $80,000.

So here goes. I'll step this out, more for my sake than yours. If I step it out I'm less likely to make an error, or jump to some conclusion without explaining the thinking behind it. Well, that's the theory behind the theory behind the theory, etc.

Let's get back to our liveable wage of $80. I think the last IPEd study of editors' hourly rates gave an average of $65, but I'm going to award myself my own CPI increase and (roughly) a 20% cushion.

If you work four billable hours a day, you'll clock up 20 billable hours in a five-day week. (Let's stick with five-day working weeks, shall we? Even though they are looking increasingly chimerical.)

(And before you throw brickbats through my window, these are average figures. If you record your own working hours on an Excel chart, you'll find the billable hours in any day vary from nil to 12+ hours. Ditto for the number of weeks that you work in any year. It all varies, which is one of the great things about being self-employed ... and also one of the infuriating things about being self-employed.)

(And, just to throw in another set of parentheses, with the goal of one day writing an entire Dear Ed between parentheses, I worked in-house a couple of weeks ago and by the time I punched the bundy I looked like an extra from Night of the Living Dead: I had the green skin and stunned-zombie walk down to a T. Being self-employed has its benefits. You read it here first.)

So, 20 hours x 48 weeks (giving you four weeks off for holidays) gives you 960 hours. Then multiply that number of billable hours by your hourly rate: 960 x 80 = $76,800, which is near enough to $80,000 in my book, although my accountant would probably quibble. But I pay him to quibble, so that's OK.

So there you have it. The final scoreboard at the end of all this financial finessing reads: Predictive Realists 1 d Predictive Fantasists 0.

Of course, if you increase your hourly rate too much and drive away possible clients then the final scoreboard will be reversed. If there are any holes in this argument, I'm sure someone who actually understands Year 7 maths will tell me. I'll keep you pestered on any updates, fiscal, philosophical or just downright mean.

Phantasmagorically yours,

Nedward