Pop Quiz Time. What is the most valuable commodity in the world? No, it’s not food nor water. It’s not air. All of these things can be bought. It’s not even money, the thing you can use to buy other things. No, it’s Time. This post talks about the value of time.
Value of Time
Time is so valuable that several Tech millionaires have invested large portions of their fortunes to get more. For hundreds of years people have searched for the fountain of youth for the same reason. While your time on this earth is a bit longer these days than it was 100 years ago due to increases in life expectancy, time is still a finite resource.
Live Every Moment to It’s Fullest
What this means is you need to take advantage of every moment you have on this planet. Now you can interpret that last statement to mean multiple things. The most common version in society is You Only Live Once. We talked a bit about this a few weeks ago. Ultimately, yes you need to live your life to it’s fullest because tomorrow could be your last. However, conversely you still need to plan for the future so that your last breath is as great as the one you have now. It’s all a question of choosing what you value and dumping what you don’t. Doing so will allow you to enjoy every moment without wasting the opportunities that lie before you. The reality is no one gets to the end of their life and wishes they worked one more day or earned one more dollar. They wish they had more time to spend with their family and friends.
Another View of Time is Opportunity
Which brings us to the Value of Time as an opportunity. Opportunity in this context has multiple ramifications:
- The Power of Compounding – The main reason money is of lower importance to time is that time buys money. I learned from a young age that money begets money. The more money you have, the more money you make. This is because by investing your money compounds, growing exponentially. The rule of 72 indicates that at the interest rate you invest your money at will double in 72 divided by that rate. So if you hit the average return of the market over time, 8%, then every 9 years your accounts are going to double. This means quickly your wealth will grow exponentially.
- Time Used for Labor is the Easiest to Deploy – Much has been said about earning money via passive activity. This is ultimately a way of freeing up the precious commodity of time later in life by using the time you have more efficiently. However, to get there you still have to hustle with active labor up front. The simple reality is that the easiest way to start making money is to deploy your labor. This could be your career, a side hustle, or starting a company. In every case, putting in the effort up front can earn dividends in efficiency both in time and money later on. Education when executed correctly for example is just a form of making your time usage more efficient. So too are investing in passive forms of making money and increasing your savings. The more efficient you are the more time you will unlock from working.
- Time Wasted By Debt – Wasted Time can also be viewed as a wasted opportunity. If you are in debt then (ignoring debt as levarage for a moment) you are in effect wasting time. Paying off the interest from a debt does nothing to free up time in the future. As such it is best to do whatever you can do to avoid going into debt. If you do fall into debt paying off the principle as soon as possible will limit the waste from the interest on debt.
- Time Wasted by not Spending Your Money on What you Value – Wasting money buying things that do not really buy you happiness is another missed opportunity. This is why “Keeping Up with the Jones” is such a bad idea. If you spend all your time paying for that status symbol then it neither buys you time in the future nor makes you happy now. So you are losing by trading your precious commodity for what?
- Time Wasted Attempting to Save Money – This is perhaps the most overlooked aspect. Sometimes in looking for the best deal or trying to save money we sacrifice more time than the dollar saved. This is the type I’m most susceptible to personally. It’s hard not to get sucked into a few extra hours trying to save an extra 10 percent. Still the value of time I give up for ten percent off say a new TV may be greater than the value of the TV its self.
So what does this all mean? It means that the path of highest return on your life leads through reducing your waste and maximizing the value of time. Avoiding debt, investing in your time usage efficiency (via building your career, education, etc), buying only whats of real value to you, saving for the future, and investing what you save will lead you to the highest valued life. They say money doesn’t buy happiness, well they are right, but it can sometimes be traded for time. And time does buy happiness, so perhaps in some ways so does money.
How do you maximize your time utilization?