The ‘time is money’ myth is a baby boomer thing. Although coined centuries ago, it became fashionable after WWII, to the point of becoming an all-consuming demon, the subject of many self-help schemes. Now, we explore how to avoid the ‘time is money’ trap.
We have all met those hyper-motivated friends in a mall, who would ask about your well-being but before you can answer properly, would interject: “Would you look at the time! Must run. You know, time is money!”
I recently read an article about time management, and the author claimed that he watches YouTube videos while taking a shower. Not fun stuff, but videos about subject matter related to his job!
Why would he do that? Because he believes time is money, and he cannot have a shower without doing something to earn the next dollar.
Time is money is a ruse
Benjamin Franklin coined the phrase in his Advice to a Young Tradesman, in 1748: “Remember that time is money. He that idly loses five shillings’ worth of time loses five shillings, and might as prudently throw five shillings into the sea.”
I have great respect for Franklin’s work and his intellect, but that phrase is simply not true.
If time was money, we could all just stay home and become rich.
Time is a commodity like anything else, including water, grain and … money. Have you ever heard “water is money?” in the same sense as “time is money?”
Time is finite, making it a scarce commodity, and therefore a valuable commodity. Yet, it is only valuable to its owner.
Value is money
Time has no intrinsic monetary value, unless you apply it in a way that offers value.
Your time is only valuable to you. When you use some of your time to offer something of value, it attracts a monetary value. That is when your time becomes valuable to someone else.
When you think about your lifestyle, and how to make changes for the better, it will serve you well to keep this in mind. Instead of thinking, you have to do something to earn something, rather change that thinking to how you can offer value to earn something.
When do we actually lose money?
Part of the time is money ruse, is the notion that you lose money whenever you are not making money. In other words, there is no neutral position, it is either make money or lose money.
Let us be clear about what it means to lose something. You have to own something before you can lose it. You lose money when you drop a dollar into a river. You lose money when you sell something for less than what you paid for it.
An executive, who is irritated because a delayed flight is causing him to lose money, does not understand the basic definition of “lose”. The flight delay might cause him to earn less, or even zero, but he will not lose money.
A small but important distinction.
Focus on becoming more valuable
In designing your desired lifestyle and achieving your personal financial goals, the key is “value”.
If your current set of skills earn you $10 an hour, then that is your current value, expressed in dollar per hour.
If you want to earn more, do not try to figure how to work more hours. After all, you only have a limited number of hours available each day. Instead, think about how you can increase your value.
With a better value offering, you might be able to earn $20 an hour. That is doubling your earnings without using more of your time. That is becoming more valuable.
“If you want to earn more, you have to become more valuable” – Travel Hippi
What to do with your new value
Broadly speaking, there are two ways to progress with your newly developed value.
- At a job
Many people love their jobs and have no desire to be in a business of their own. They are on a continuous path of becoming more valuable, thereby increasing their ability to demand higher earnings, a higher dollar per hour.
- In a business
Others choose to use their value in their own businesses.
Some of these businesses are no different to a corporate job – the owner puts in a certain amount of hours, and earn a certain amount for it. For example, a small coffee shop in suburbia would be open on fixed hours and yield a steady income.
Other businesses operate as automated systems, allowing an owner to leverage his value exponentially. For example, on online store with a drop-ship arrangement can sell 24/7 with only limited supervision and maintenance required.
Detach your value from your time
Once you can detach your value from your time, you will have complete power to avoid the time is money trap.
The example of the online store is a good illustration of how you can earn something without the need to be physically involved. It is moving from owning a job, to owning a system.
Having said that, you can remain in a steady job and still avoid the trap. By focusing on your development and becoming more valuable, you will effectively achieve the detachment.
Your decisions about becoming more valuable and applying it, are influenced by your lifestyle choices. And vice versa.
It is a trade-off between time and money; one that we are all too familiar with.
Here are typical lifestyle questions:
- How much of your spare time are you willing to invest in earning more?
- Do you prefer a short-term solution: working more hours and immediately earning more money?
- Do you prefer a long-term solution: investing time in becoming more valuable, in order to earn a higher rate in future, by working the same or less amount of hours?
The latter is short-term pain for long-term gain. More eloquently, it is delayed gratification.
If you want to design a lifestyle of your choice, you need two important keys. Delayed gratification and the detachment of your value from your time, are the two keys.
Clear plans make good choices
In a previous article, I discussed a money mindset for financial independence. When you are clear about your money plans and retirement goals, your lifestyle decisions become easier.
The more you focus on value instead of time, the more you will value the time that you have. Moreover, the easier it will become to avoid the time is money trap.
“Depending on whom you ask, time is money, time is love, time is work, time is play, time is enjoying friends, time is raising children, and time is much more. Time is what you make of it.” – Philip Zimbardo
I would love to have your thoughts about the ‘time is money’ mantra that so many people use.
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