Every hour, minute and second is like a precious relic – there is only one like it, and once it’s gone, it’s gone forever. That’s why time is one of the few absolutely scarce commodities.
For many of us, it is the only truly scarce commodity we will ever deal with.
It’s therefore crucial to grasp the true value of time before making any financial decisions – if you don’t, you will certainly misjudge opportunity cost, downside risk, and “the cost of doing nothing”.
Value your OWN time!
The challenge, therefore, is to correctly value every piece of your own time, remember, unlike other commodities we make trade-offs about, time is literally irreplaceable.
Some companies even allow staff to place a precise dollar value on their time by allowing trading of vacation time. You must correctly value different times differently, too. As Aaron Swartz reminded us, “First, you have to make the best of each kind of time. And second, you have to try to make your time higher-quality”.
Don’t drink the rationalism kool-aid
Some economists may tell you that if you can do a job quicker or cheaper than anyone you can pay to do it, then it’s the “economic, rational” choice to do it yourself. That might make sense on a spreadsheet, but it falsely assumes that time is fungible. Sure, if you earn $50 per hour, each hour is theoretically worth $50 (after tax). But if the choice is between paying someone else to perform a four-hour task, or missing your grandson’s 10th birthday… Well, you need to think through the true value of that specific four hours to you and your grandson.
Trading time is everything
Everything is a time trade? Yes, everything. Your whole of life is about making trade-offs with the time you have, to achieve the things you want to achieve. A large analysis has shown “people have a stable preference for valuing their time over making more money, and prioritizing time is associated with greater happiness”. The authors suggest “If people want to focus more on their time…they could take some actions to help shift their perspective, such as paying someone to do disliked chores”.
Add value to your time, add value to your life
Only you know what experiences and commodities are your most valuable. You must remove waste from your life, whether time wasting or wasteful spending – you’re really spending the “time” it took you to earn the money anyway. Doing this literally adds value to your life, by freeing up time for experiences or commodities you’re passionate about. Let Bill Butler free up the repetitive book-keeping elements of bill payment and invoice management, provide you with focus to grow your personal financial success and use the time gained to add value to your business, your family life, or your passion!
Jay Stephens, Lead Thought Provoker
Jay began his career in London with Rabobank, CLS bank and a Lloyd’s of London syndicate. Jay’s work has spanned corporate communications, content editing, newspaper articles, courseware, blogging, policy drafting, technical writing, and a regular crossword. He is passionate about 8-bit tunes, self-improvement, and the Oxford comma.