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Building a Personal Finance Spreadsheet Part 1: “Transactions”

Why Should You Hire a Virtual Assistant?

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Here at LLB, we have a virtual assistant. This is a source of great fascination to many of our friends, most of whom fall within the “young professional” bracket.

I think people jump to a lot of conclusions about this practice without really understanding it. Notably: it is decadent, lazy, exploitative, and weird. I don’t believe it is any of these things, and will come back to this subject. First off, let me begin by giving an overview.

A virtual assistant (VA) is a personal assistant who you do not interact with face-to-face. In many cases your VA is offshore, typically in India or the Philippines. Hiring a VA is much cheaper than hiring a traditional personal/executive assistant, since wages in the developing world are a fraction of those in the west, and there is no need for additional office space. VAs are classed as contractors, and therefore come without the added costs of employee benefits, insurance and tax.

How much time could you gain?
The concept of the VA shot to prominence with Tim Ferriss’s The 4 Hour Work Week, which advocates outsourcing your life wherever possible (Ferriss has gone so far as to outsource his online dating!). Still though, it remains a fairly unusual practice, so let me explain some of the logistics and costs.

There are a number of firms which will allow you to hire a virtual assistant. A Google search will reveal a panoply of options, which can be a little overwhelming. Some of the big players in the VA market are: www.redbutler.com, www.asksunday.com and www.habiliss.com. Note that these firms are slightly different to freelance network options like elance (www.elance.com), though there is a huge potential overlap between these two concepts. To generalise: a VA firm will provide you with a “helper” who will do a range of your everyday admin tasks, whereas a freelance network site will allow you to hire more of an expert for a specific project. However, the reality is far greyer, as if your project is long-term then the sourced expert will probably be required to manage a range of stakeholders, do admin, and other “VA tasks”.

The purpose of this post is not to advocate one firm over another. We’d encourage you to try a range (most give you a free trial). Here at LLB, we hire a VA through the firm www.getfriday.com. We’ve found the experience extremely useful. Here are a few randomly selected tasks our VA has completed for us over the past few months:

  • Market research for a start-up idea
  • Compiled reading lists on certain topics (e.g. Dow Theory)
  • Researched job opportunities
  • Found webdesign learning resources
  • Booked tennis courts
  • Found some Christmas presents

Basically, if it’s legal, relatively simple, anddoesn’trequire them to be physically there, they can do it. When we signed up to our firm, we had a VA allocated to us who has been our permanent primary contact. Our VA is reachable by phone from 9-5 UK time, and will call us if he has any questions. Like all VAs from this firm, he is a university graduate. However, he is supported by a back-office team with a range of expertise (Excel, Finance, webdesign, SEO etc.) who will interact with you if need be. In the event that our VA is sick or away, one of his colleagues provides cover (at a premium if it is out of office hours). This is one of the key advantages of going through an established VA firm – they can leverage their talent-pool to offer you a better service, and one which is genuinely 24/7.

* So how much does it cost?*

You buy VA packages in a similar way to how you buy mobile phone deals – you can go for a “pay as you go” or a “pay monthly” style deal. The more hours you buy, the cheaper per hour it works out. At LLB we use our VA as a shared resource, since clubbing together allows us to buy a larger package and hence get a better deal. We pay approximately £6.20 ($10) an hour for our VA.

An important cautionary word. You get what you pay for. Whilst we have been impressed with the work we have received, the quality of written English is generally poor, and you have to be willing to invest time to teach yourself how to communicate tasks clearly. There is a huge cultural divide, and any instructions are typically taken literally. We have found the following strategies have improved our experience greatly:

  • Explicitly stating what the final “product” will look like: is it a list in a spreadsheet? Is it a paragraph summary? Be specific.
  • Stating what we do not want.
  • Being clear about how long we expect the task to take, and asking for clarification if more time is required.
  • Being open to questions
  • Tracking all hours/tasks
  • Giving regular feedback

Whilst this can be frustrating, we view it as excellent practice for learning to delegate effectively. The LLB team is obsessive about personal development, and this is one of the best ways to teach yourself to be an effective manager. If you get what you expect, you’re doing it right.

So this should give you an idea of what a VA is and does. So should you get one…
The key question to ask yourself is: How much do I value my time?
For some people, perhaps this is a slightly strange way of looking at things, but here at LLB we’ve all worked in consultancy at some point, where we had an hourly rate, and had to record our time every week. Whilst this practice is a grim commoditisation of human endeavour, we’ll save the metaphysical implications of it for another post (where we’ll probably also talk about the hideous term “human resources”), and just note that this neurotic time-counting had a benefit. Constantly tracking your time makes you appreciate how long you spend doing Stupid Shit: Process-orientated tasks, tasks which require no expertise onceyou’vebeen shown how they work, chasing other people to do their Stupid Shit, basic admin, and telling other people thatyou’vedone said tasks. An old colleague of mine once brilliantly referred to these kinds of things as “trained octopus tasks” or TOT.

The thing about time is you value it more when you’ve got something you would rather be doing. If you’re trying to work on something creative or complicated, then removing the distractions of TOT will de-clutter your mind, reduce the anxiety that comes with having other things you need to do, and allow you to focus. In cooking this is known as getting your mise en place, the TOT (chopping onions, washing vegetables, preparing stock etc.) is all done. What remains is the complicated bit, which requires skill and creativity.

This is doubly true if you are working on something you are passionate about. I’m working on a range of entrepreneurial ideas which I highly value. The concept of paying someone to either take care of distractions from these projects, or help me with the legwork makes perfect sense. It can also help you combat a strange quirk of human endeavour: the tendency to procrastinate. The number of times in the past I’ve thought to myself “I could work on this project…but I need to do more research” or words to that effect is sobering. Knowing that someone else is doing that preparation for you removes procrastination barriers and funnels you towards work. Obviously a VA is no substitute for discipline, but a VA makes it easier to be disciplined.

So why all the funny looks? When I tell people about my VA they think it’s weird. Even when I explain how it works, I tend to get a laugh and a shake of the head, followed by a “that sounds really helpful”, with the subtext “but I’d never do it”. I think the answer is two-fold: reluctance to venture outside the norm, and an inability to see value. I would contend that for the price of a couple of pints of beer (at least here in London), most of my friends would get something which would easily payback their initial investment from their VA: finding them a cheaper deal for that holiday, building them a monthly expenses spreadsheet or even researching where they could buy cheaper pints of beer! But we’re not conditioned to think in this way. For all the consultancy-speak about “outputs, not inputs”, many of my peers still feel like they should do certain things for themselves. Outsourcing parts of your life is unusual, and that makes people I know think it is risky, lazy or wrong.

There is a potential third category of objection (which I have a lot more time for) – those who believe it is unethical. It’s beyond the scope of this post to really explore this issue, but my stance is that paying and teaching people who are potentially freelancers is actually an empowering act, and that the VA system is meritocratic. Whilst the fact that there are lower wages in other parts of the world starkly highlights the inequalities inherent in capitalism, that is nonetheless the world in which we operate. I personally don’t know of anyone who has succeeded in truly rising above this system, as it would basically require you to live in a cabin in the woods and never buy anything imported or researched abroad.

So, what are the risks? You could receive a poor service. You could be defrauded on the internet. You could reveal too much personal information. Sound familiar? These are just risks you take everyday anyway. Be smart, and use your discretion. The real risk is that you continue doing trained octopus tasks when you could be doing something amazing with your time.

Get the balance right.