So I’ve been reading The Miracle Morning and for some reason it made me wonder about real jobs. And that got me thinking about how much people actually make.

So let’s say you are an average American.

The average American’s Personal Income per Capita is $43,735 according to the US Department of Commerce. As with all government statistics, this should be taken with a grain of salt.

Let’s assume this income is from a 40-hour work week. That works out to $174.94 a day or $21.87 per hour.

First, let’s realize that the hours you spend at work are not all the hours you spend on the job. There is the commute and the getting ready in the morning. So let’s say you commute 20 minutes each way (the Population Reference Bureau says 25 minutes is average) and spend 20 minutes getting ready that you wouldn’t otherwise spend. So you’re (maybe) going to eat breakfast whether you go to work or not. So that time wouldn’t count. But you can easily add another hour to your work day for commuting and getting ready. So your per hour rate just went down to $19.43.

And then there’s lunch. I think the days of being paid for your lunch hour or lunch half-hour are gone for the vast majority of people. So with a half-hour lunch, your hourly rate has now dropped to $18.41 per hour.

And then there are all the expenses you have that are directly related to your job.

That commute that you are driving costs you not just in time, but in gas and wear and tear on your car. Using the IRS’s data of 56 cents per mile and the average commute being around 14 miles each way, you are spending $15.68 on your trips to and from work (And yes, I know it’s not tax deductible). Basically your first 45 minutes of your job is to pay for you to get to work.

So now our daily earnings just went down to $159.26 and our effective hourly earnings fell to $16.76.

And what about your work attire? Whether you wear a uniform or “business attire” most people’s work clothes are not the same clothes they choose for themselves in their personal lives. The cost here can vary greatly depending on personal preferences and job requirements, but from what I’ve seen from my tax clients, I think $800 per year is a pretty conservative estimated average. This would factor in the purchase and cleaning of work clothes. So that only hits us for $3.20 per day leaving us with $156.06 per day or $16.43 per hour.

And about that lunch that you don’t get paid for. You still have to pay for the food. How many people in your office brown-bag it? What does the average work lunch cost compared to the average meal that person would have had if he or she had eaten at home? I’m going to say an extra $7 per lunch over and above what would have been spent on a meal at home. This also would include things like your morning Starbucks coffee and similar on-the-go purchases. Admittedly, this is pretty much guesswork. That extra $7 knocks down the daily income to $149.06 and the hourly rate to $15.69.

And let’s not forget about taxes. Wages are, of course, highly taxed. You are paying social security, medicare, federal income taxes, probably state income taxes, and maybe local income taxes as well. How much your tax burden is depends on your individual situation. But we’re going with average here, so we’ll take 7.65% for social security and medicare ($3,345.73), and a taxable income of $23,235 (gross income less $10,750 in standard deductions and $9,750 in exemptions for 2.5 people) makes a federal income tax burden of $2,562.75 and an average state income tax burden of $929.40 (4%). Combined, this hits our average taxpayer for $6,837.88 per year. This brings our daily income down to $121.71 and our hourly income down to $12.81.

So by this point we’ve already spend 31.5% of our average income and 41.5% of our hourly rate on just getting the income in the first place! Said another way, your average American works from January 1st to May 30th just to take home the money from June 1st to December 31st.

It’s no wonder people find it so difficult to get ahead. That $43k per year job only pays them $30k, and they are making less than $13 per hour net. And I’m probably leaving a lot of costs out that make the picture even worse (hello, childcare).

So what is the point of this rather depressing exercise? The good news is that if you develop your own sources of income that are not tied to your job, the bar is set pretty low. If you can come up with $120 per day, you’ve replaced your average day job income.

There are something like 300 million people living in the US today. So there are probably about that many ways to make money without working a job.

Personally, I am developing my passive income in physical and virtual real estate. I haven’t replaced my own day job yet, but it’s only a matter of time.

For those stuck in jobs they hate, pursuing active income will be a faster road to freedom. Maybe you’re an artist who can sell on etsy. Maybe you’re a writer who can write ebooks and publish on Amazon. Maybe you’re a dog walker and just need to push your sales & marketing to get more clients.

Whatever the case may be, there is value you can offer to others. Find your value and offer it to the world.

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