Money equals time: a valuable commodity

Thinking about money can be confusing and boring. The math is enough to make your head hurt! If you’re not that financially inclined, then it may be useful to think about the relationship between money and time. Basically money equals time.

First of all when you are earning money, you are usually trading your time in return for money.

That money is then used to pay for necessities, conveniences, and luxuries. And sometimes money is used to save you time in other areas of your life (such as paying someone to clean your car or home, or ordering a takeout so you don’t have to cook).

Unless you pursue entrepreneurial opportunities, the money you earn over your life will be largely restricted to the time you spend working.

Therefore the biggest cost to you in earning your money is the loss of time that you have available to pursue other activities and pursuits.

When deciding if you wish to purchase a good or service, it would be helpful to think about how much time it will take you to earn it. If you think this way then occasionally, you may find that you would rather save the money for something else.

If you are in debt then you don’t really owe money, you owe your time and labour to someone else. It would be useful to add up how many hours you need to work to repay the debts that you owe.

If you waste your money, you are really wasting your time. If you waste your time, you are also wasting your money (or at least the opportunity to make money).

An alternative view is that you can waste far too much of your time trying to make money. How many of you have spent the best years of your life doing things you don’t want to do so that you can accumulate money, and then find yourself in later life unable to enjoy it.

The retirement dreams of many are built on the illusion that you can work until you are in your sixties and then suddenly you will be willing or physically able to live a carefree and adventurous lifestyle. I hate to burst your bubble, but I am a bit of a backpacker, and I can assure you of the following. Many of you will not have the physical capacity to do the things you wish to in your life if you wait until your twilight years to do them.

Furthermore even if you are lucky enough to be physically capable, if you spend a lifetime trading your time and money in return for luxury and comfort, you will not want to suddenly embark on things outside of your comfort zone and visit places that are uncomfortable to visit.

Trust me I know.

The reality of visiting that stunning remote beach is likely to mean a flight, a train journey, a bus ride, two boats and sitting on the back of something loosely resembling a car who appears to have learned their driving skills watching formula one and playing Mario Kart!

The relationship between money and time is important. You can use money to save you time in the future. By saving and investing today, you can ensure that you don’t have to work when you are older and are effectively purchasing time. Time to pursue the things you want in life, or simply to live comfortably when you are physically or mentally unable to trade your time for money.

If you have money you have control of your time, which could be exchanged for free time or more comfortable, enjoyable time.

The following saying sums things up quite well.

“A poor person spends time to save money. A rich person spends money to save time.”

When you don’t have much money, you need to put in the extra time to obtain money, whether it’s working extra hours in your job, working a second job, building a side business or improving your skills and knowledge. All of these activities will reward you with extra money, which you can use to purchase time in the future.

Ultimately becoming prosperous means that you have free time. Time is the most valuable commodity in this life (okay that may be a little extreme: I’ll place it fourth after water, food and oxygen!).

It doesn’t mean you won’t be busy. But you get to choose how to spend your time and can pay someone else to do all the things you don’t want to do.

If you think about money as time, it may appear more important to you not to waste it.

Get in touch today for a personal, independent, and comprehensive financial plan.

Mark Underdown | DipPFS IMC CeMap

Financial Planning Consultant


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