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525,600 minutes
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1. 525,600 minutes
The most precious commodity we have is our own time. Every decision we ever really make is some form of arbitrage of our limited time. It is constantly slipping away from us, whether I decide to nap this evening or to watch the super bowl, that time is gone. I can’t get it back, I can’t refund it, I can’t exchange it for something else, it’s gone.
When we work or do a task in exchange for something else, we are attempting to encapsulate some of our time in order to be able to use and exchange it later. The creation of money itself can be said to be an invention that financialized the most intangible of assets, time.
You’ve probably heard the boring phrase “Time is money,” many times before, but if it were true, then people would be saying the opposite often. Yet tell me the last time you heard someone tell you “Money is time?”
Nobody ever says that. But from where I sit, time is not money, but money most certainly is time. I suspect we often say time is money because it translates well to some of our pro-social goals, including convincing people to trade their time for money. Choose a job, clock in, and exchange that thing you have “time” for that thing you want, “money.”
When you don’t have any money and you have a lot of time, the above makes sense. But eventually, the two lines cross and you begin to realize that time is far more important and that you can’t buy your time back. But you can buy your future time before it’s sold. I outline this in my FAQ post, but it bears repeating.
Say you have an income stream of $1,000/month net. And your expenses are $3,000/month. The price you are willing to pay for this asset, is the same price at which you value 33% of your freedom. In this sense, most assets seem to be significantly undervalued when asking how much your time is worth. Someone that is unwilling to undertake financial risk to buy their own time, is telling you something about themselves. They either do not understand their time, or far worse, they do not value their own time.
They are printing paper every day, but they aren’t printing minutes… yet. Exchanging paper for minutes is the easiest trade you’ll ever make in your life. If you have the right resources in your life, that realization will come earlier and you can leverage the extra time to arrive at this point quicker. But even if you come to this realization later in life there is still so much that can be done with it.
To really quantify how much time is worth, I think it’s important to think about how much of it you really have left. A few years back, I had a poster made to help me visualize just how much time I had left. It hangs over my bed, and I fill it in every week.
In a few weeks, 2 years will have passed since I purchased this poster. If I live to be 80, that represents 2.5% of my life. But for what portion of my life will I be healthy and have a functioning brain? There’s a chance that this period of my life could represent 10% of my good years, maybe more if I die early. That’s a lot. Thankfully, these last 2 years didn’t fly by, in retrospect I think they were very full and I don’t have many regrets about how I spent them. However, when thinking in economic terms, how much money would I pay to truly own 2.5% of my life? How much for 10% of it?
What urgency would I put towards coming into ownership of my entire 24 hours as fast as I can, rather than owning the 4 hours allowed to you if you are employed by someone else? I’m not saying to quit your job, but I am saying that certain expenses can be put off, and certain forms of saving money can be ignored.
You’re not going to catch me buying designer brands unless the dollar amount of the object is low enough for me to not care about it, to begin with. You’re also not going to catch me spending 30 minutes clipping coupons to save $17.50 at the grocery store, I value my time too much for that.
This is where we reach the economic crossroads where most people mess up. Many people end up poor while trying to make good financial decisions. That’s horrible. Far better to end up poor because you made fun choices that you knew were bad.
Many people try to save and scrimp their way into wealth. Your friend that’s maxing out their 401k and religiously reading the FIRE forums is praying to the wrong God and will end up in hell right next to the guy who took out a 20% loan to buy a used corvette. But at least the corvette guy had a cool car.
You will never save your way to wealth. The only path to wealth is by increasing income and increasing assets that generate income. Assets that generate income can be sold for a multiple of their annual income. You get to collect the income the entire time, and when you sell you can cash out significantly.
Time spent saving only pays you once, and you can only ever save up to 100% of what you spend. Time spent acquiring income pays you repeatedly and has no ceiling for how much you can make. The correct choice is obvious. But the reason why people choose FIRE instead is typically cowardice or sometimes ignorance. Yes, you might fail while trying to find an income stream. You may even fail a number of times in a row. But you only have to be right once. And if it’s a good income stream you can sell it at a later date for 10-30x its annual income.
If you aren’t entirely convinced, think about this. No one truly comes to value their time until they run out of it. The elderly can tell us a lot about the end of our own lives, in what they choose to do with the time they have left. Today, despite there being no proof of concept, many people are willing to pay hundreds of thousands of dollars to freeze their bodies or just their heads in the hopes that they can be brought back to life someday in the future. This is how they valued time at the end of their life.
These bodies lay frozen in darkness in the hope of achieving a fraction of what you have today. They paid hundreds of thousands of dollars just for the chance for more time. Some only froze their heads, what sort of life could they possibly hope to achieve upon being unfrozen?
Yet, they were willing to pay for even just that. It’s an affront to your own mortal soul and the remainder of your life for you not to at least take an interest in the concept of buying your freedom. Buy more income. Through that, you can buy your life back.
Think about what percentage of your life is already gone. Imagine yourself on your deathbed, or on a one-way trip in the back of an ambulance. What might that person trade to be where you are today? How much might they pay to have an extra hour, day, or week? What might they want to do differently? You have today what you will one day consider a priceless treasure. You owe it to yourself not to waste it.
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