Making $10,000 Per Hour

$10k per hour

One of my favorite bloggers, Khe Hy over at Rad Reads, likes to talk about the concept of $10,000/hour work.

It’s an intriguing concept, to say the least. The way Khe frames it is by setting out the dimensions of skill and leverage.

The bookends are as follows:

On one end, you’ve got low skill multiplied by low leverage.

This is your $10/hour work.  In other words, the boring stuff.

On the other end of the spectrum, you’ve got high skill multiplied by high leverage.

This is your $10,000/hour work.  The magic stuff.

Below is a nifty table that sums it up – and a detailed post that lays it all out.

Source: RadReads.co

To say I love this mental model would be an understatement.

Applied correctly, it has the potential to supercharge your progress in pretty much any endeavor.

However, like most things in life, it’s also 100% subject to execution.

It’s blindingly obvious that $10,000/hour work is where you want to focus your efforts. But in order to do so, you’ve got to identify this kind of work first.

As Khe himself acknowledges, that’s not straightforward.

In his words, $10,000/hour work is “hard to define, but I know it when I see it”.

So what exactly could you do to make $10,000/hour?  Does this kind of work really exist?

And is it always the case of “more effort, more money?”

In today’s post, I am going to look at $10,000/hour work from three distinct vantage points:

  • An investment banker
  • A blogger
  • An investor

Let’s dig in.

$10,000 Per Hour In Investment Banking

With my investment banking hat on, the split could be delineated as follows.

We can safely skip the $10/hour work like actually showing up, managing your inbox, and paying attention.

Elevating yourself without getting such basics in place is as likely as winning the Tour de France without a bicycle.

Assuming you’ve got those basic skills nailed down, you can move to $100/hour work.

In this category, you’ve got things like drafting marketing materials, signing off on financial models, and managing internal processes.

All important stuff, no doubt. And yet, best left to capable associates and vice presidents.

$1,000/hour work, on the other hand, is client-facing in nature.

Judiciously deploying political capital in order to get the full strength of the franchise behind an important pitch.

Shepherding CEOs and CFOs through transactions that might define their working careers.

Stepping in at critical junctures of the deal in order to get it over the line.

You simply can’t let any of this slip.

Drop the ball and you won’t be long for the investment banking game.

Equally, none of the above alone will land you a spot in the truly senior ranks – because the reserve of $10,000/hour work looks drastically different.

It starts with convincing the powers that be to deploy an outsized amount of money behind your team in order to take advantage of the market opportunity.

Then, it’s using that money to hire top-notch junior and senior bankers. The kind of bankers who can do all of the $100 and $1,000 work with minimum oversight required.

All while you spend your time identifying clients that will drive significant deal (and fee) activity over the next decade – and putting in place a comprehensive, effective coverage plan.

This isn’t easy stuff, especially layered in on top of a 70-hour week.

It takes years for your efforts to bear fruit, and when they do, you’ve still got to fight to ensure you get the right recognition.

This is why so many talented, hard-working bankers tend to stagnate once they reach the director / junior managing director stage of their careers.

They’ve got the technical knowledge. They’ve got the client-facing skills. But then, the game changes on them again.

Focusing $1,000/hour work may have taken them from lowly analyst to a swashbuckling managing director.

Alas, it will not propel them to that airy, spacious corner office and an annual trip to Davos.

$10,000 Per Hour In Blogging

Given that I don’t run this blog for money, I could be getting ahead of my skis here.

But for those with aspirations of becoming a full-time blogger, you could think of the following split.

$100/hour work is engaging with readers, building an effective social media presence, and managing your email list.

$1,000/hour work is creating evergreen, highly engaging content, optimizing for SEO, and monetizing your affiliate relationships.

All critical ingredients in a recipe for a successful, money-making blog.

But none of the above will elevate you into the ranks of bloggers who make $1m+ a year.

In blogging, an example of $10,000/hour work is developing the kind of media relationships that can get you featured on publications like Forbes and CNBC, giving you access to millions of eyeballs at once.

It’s getting your SEO strategy to a level that allows you to land one of the top 3 slots for highly competitive terms like “investing”, giving you millions of search engine visitors every month.

And when you develop that kind of a reach, it’s about making sure you keep the lion’s share of the economics – either by renegotiating terms with your affiliate partners or selling your own products/courses.

This isn’t easy stuff. It takes a lot of effort, time, and yes – money.

Which is precisely the reason you rarely find part-time bloggers on the front page of Google.

The ones you do find often pretend to be part-time (“make money blogging 15 minutes a day!”) but in reality run full-on, highly professionalized businesses.

But does the picture look any different when we turn to our favorite pastime?

$10,000 Per Hour In Investing

In investing, the basics are easy.

$10/hour work is spending less than you earn.

If you want to make your sacrifices count, you better invest the difference in low-cost index funds [link].

This is your $100/hour work. Nothing more, nothing less.

In order to elevate yourself to $1,000/hour work, you will need to be a lot more strategic.

Unsurprisingly, a lot of it has to do with taxes.

Squeezing out every single ounce of juice from your workplace pensions (thankfully, there’s a multitude of relatively easy ways to do just that).

Getting creative with vehicles like Self Invested Personal Pensions.

Identifying any looming capital gains – and finding effective ways to defuse the taxes on them.

A couple of deft tax maneuvers can easily juice the value of your “pot” by five, six, or even seven figures, depending on how much you start with.

But they will never move the needle as much as $10,000/hour work.

Which, when it comes to investing, is doing nothing.

That’s right.

Nothing at all.

There are very few situations in life where doing nothing is the best course of action.

One is staying in your car if you ever get stranded in a blizzard.

Another one is remaining in the same place if you ever get lost in the woods.  Every mile you walk expands the search radius exponentially.

In investing, the equivalent of $10,000/hour work, the elusive magic stuff, is doing nothing when the world collapses around you.

Make no mistake – these moments will come.

They won’t be frequent, but when they do, it’s going to feel like the end of the world.

Over a forty or a fifty-year investing “career”, you are likely to experience just four or five massive market meltdowns.

I am talking about the kinds of meltdowns where your significant other is threatening to divorce you and your kids think they’ll never go to college – all while you feel like you want to vomit because you’ve just lost 50% of your life’s savings.

And the only factor that will determine your track record as an investor is doing nothing when it happens.

Napoleon once defined military genius as “The man who can do the average thing when everyone around is losing their minds”.

An investing genius is no different.

You won’t have many opportunities to do $10,000/hour work as an investor.

But when they do come, you better make them count.

Thank you for reading – and happy investing!

About Banker On FIRE

Enjoyed this post? Then you may want to sign up to our exclusive updates, delivered straight to your inbox.

You can also follow me on Twitter or Facebook, or share the post using the buttons above.

Banker On FIRE is a London-based M&A (mergers and acquisitions) investment banker.  I am passionate about capital markets, behavioural economics, financial independence and living the best life possible.

Find out more about me and this blog here.

If you are new to investing, this is a good place to start.

5 Comments

    • Agreed and so true. I’ve been into factor investing recently and it’s good to bring it back to reality. The one factor that matters is having the nerve to hold on and do nothing.

      • Factor investing (especially momentum) is like a rollercoaster.

        When it works, it works tremendously well. But when it fails, all bets are off 🙂

    • Cheers

      We all do 🙂

      It won’t happen often and when the time comes, many will fail. Those who manage to keep their nerve will end up far, far ahead of the game.

      • We have certainly all read that dead people do the best in long-term investing (assuming they have invested in a traditional index fund). The gap between an index fund and people who invest in index funds but jump in/out is telling. I have a folder full of such statistics and graphs ready to stop me from doing something stupid.

1 Trackback / Pingback

  1. Wednesday Reads: Start of the Sabbatical - Dr FIRE

Leave a Reply