How do you decide the value of something? Is it the price someone asks for or is it based on the time spent on making something? The value of a glass of water to a person hiking for the past four hours is different than to a person sitting in an airconditioned room.
I realized how subjective finding the value of a task or an object is. It is as subjective as your preference for a particular food. Factors that affect value one derives range from economic (demand-supply), social (status), to emotional (fear-greed).
Economics uses the concept of utility to define how much value you derive from consuming something. For ex. a person who is thirsty will derive maximum value from the first glass of water and as he consumes the second and so on and so forth the utility from additional glass keeps declining. This theory may not apply to winning and earning. In fact quite the opposite. No one would mind earning more and then more and more money.
Economics always assumes that the person to whom theory applies is rational being. Truth is far from it. I haven’t found or read about a single person who has been rational consistently. Number of thoughts and ideas that run through human brain during a day itself is in millions. These along with your past experiences lead to emotions. After all this comes decision making. How can we expect ourselves to be rational when so many factors at any given point in time affect our ability to take decisions?
How can we use this folly to our benefit in trying to find value? When it comes to deciding value from doing something that you love to do, value it the most. Give it the highest value, using something that makes you happy (emotion) to derive value.
Next assign on a scale of 10 the amount of satisfaction that you derive from doing a particular task. Prioritize tasks with highest score and perform them. This framework is build on a fundamental principle of doing things that make you happy because this way success comes naturally and nothing feels like a task anymore.
Another framework you can use to decide value while purchasing anything is fast forward to a couple of days from now and answer do you regret buying this? If the answer is yes, then don’t buy it and save yourself from the pain of regret. Now, this framework is far from perfect because we might think we won’t regret it but still end up regretting in the future. That’s OK, don’t beat yourself for it. Learn and adapt. In a broad sense, this framework does wonders for quick decision-making and avoiding impulse purchases.
The fundamental behind finding value as I see it is you decide the value for products you consume and activities that consume your time. If you’re doing a job just to pay bills and feel miserable doing it, you should reconsider doing it. It shouldn’t have to be an immediate decision but the process should start.
You might end up over or undervaluing things based on the state of mind you are in, again that is okay. You gain some, you lose some. For “experience is what you get when you don’t get what you wanted in life”. What is the value of the experience you ask, the risk of making bigger mistakes and losing more when you could have learned it easily by losing less? On a lighter note, you could try applying for a corporate job, this will help you know the value of experience.