| Real Life Strategies for Building Wealth

time is love

Editor’s Note: You know how the saying goes that ‘time is money’. Well, I’ve always have had my doubts about this one. When my new friend Eli approached me and asked whether I’ll be interested in publishing a post about claiming that ‘time is love’ on The Money Principle, I was very excited. This is the post Eli wrote and I hope you enjoy it!

“Hey honey, have you thought anymore about that trip that I’ve been wanting to take?”

“Oh, you know I have a project due for work. I don’t have the time to think about that.”

That’s not romantic.

There is an alternative scenario:

“Actually, I’ve been looking into it quite a bit. I had a few moments and came up with some travel options.”

That’s romantic.

The difference? Time.

Let’s back up to see how we can make you romantic – that is, how we can give you more time. When we think about doing things, we’re often influenced by money. If you want to go to a theme park, you have to pay for admission. Saturday movies? $10 a pop. Flights across the Atlantic? You’re dropping a couple grand. Sunday joyride? That’s gas money. Even a seemingly free stroll around the neighborhood could eventually cost you if it causes you to miss deadlines in the office.

Money finds it’s way into nearly every facet of the human experience. As such, those that are “good with” money tend to be a bit more romantic than their monetarily clueless counterparts. It’s not the spreadsheets, counting ability, coupon clipping or fiscal cognizance that make them attractive.

Rather it’s the idea that satisfactorily managing your money tends to lead to rewards: security, independence, sleeping well at night, choices and that sort of thing. There’s the romance.

However, when you think about it, all of this is just an intermediate step. If you’re considering a purchase, you’re likely thinking in monetary terms. When you go to Chipotle, you see that a burrito bowl and chips go for $8. Sure it requires the same $8 for everyone to purchase, but it doesn’t truly “cost” an identical amount. For someone making $8 an hour, that burrito bowl represents an hour of work. For someone making $32 per hour, that same item cost just 15 minutes of work. That’s the true trade: time for a tasty meal. Time doing things we might not otherwise chose to do, in order to obtain items that we do like. We trade our valuable and finite resource of time for currency – an intermediate tool with which to barter.

In both instances – 1 hour of work or 15 minutes worth – it’s likely you’d make that trade (Chipotle is delicious, after all). However, this isn’t always going to be the case. When we start to consider larger purchases, the analysis becomes much more apparent.

Think about a car or a house – big-ticket items; or anything that cost more than a day’s worth of wages. If you can’t pay for all of it today, you have to pay for it sometime. In essence, you’re borrowing against your future time in order to enjoy something today. Now assuredly many “big-ticket” items provide value or satisfaction and could arguably be considered near necessities. Yet always keep in mind the trade-offs involved – the opportunity costs of placing today’s wants ahead of tomorrow’s independence.

Consider two houses. The first is a comfortable (cozy) home that fits within your budget and provides all the essentials. The second is a much larger one, but would certainly “stretch your budget.” (I always found this phrase to be a bit counterintuitive. Perhaps I’m mistaken, but to me a budget is something that keeps your spending in check. If you’re then able to magically “stretch it” to mean, “buy whatever you’d like” it seems there was little need to come up with a number beforehand.)

Anyway, you could go with the first house and be comfortable. Or you could go with the second one, thereby “stretching your budget.” It’s understandable that you might want more room. However, if you can’t truly afford it, consider what you may be giving away. You get more space (woo!) in exchange for less free time in the future (boo!).

All too often people don’t consider the implications of today’s decisions. The person that buys too much house rarely considers the overtime, additional hours or working an extra 5 years it might take to pay off the increased mortgage. People don’t think like that. Instead, they imagine: “boy, a fourth bedroom sure would be nice for visitors.” You think you’re “buying the dream” when in reality you’re purchasing a drain on your future independence.

Now it should be underscored that these are all personal decisions. I’m not here to tell you what to do. Instead, I simply want to indicate that every decision has a consequence. If we let stuff be the goal (bigger house, nicer car, swanky clothes) then it forces everything else to the backburner. Consider that money isn’t the takeaway; time is the asset.

What’s great about this ideology is that you’re not thinking about restraint. You’re not thinking: “how can I live in the smallest, cheapest place possible.” Instead, you’re thinking about maximizing the value of each decision, while keeping in mind your finite resource of time. It’s not about skipping the movie because it cost $10 and you don’t want to spend money. It’s about considering that a free day in the park might be just as enjoyable (plus you have the freedom to use those funds elsewhere now).

Thus my contention:

Time is love.

And if I haven’t convinced you yet, I’ll take one more stab at it.

Perhaps the most romantic of things (for some) is the idea of marriage – trusting completely in another. To get married, you usually have to ask if the other person would be willing to do so. It could be as simple as that. Yet we customarily ask this question in a very peculiar way: with an engagement ring.

So how do obtain one of these? Well you buy it. How much should you spend? Here’s a general guideline:

3 months salary

Ah, you see time is romantic. Notice that an exact dollar amount wasn’t quoted. It’s not about that. It’s about an acknowledgement of good faith. Talk is cheap (or so the jewelry stores would have it). The purchase is symbolic: “I’m willing to trade 3 months of my time for this tiny, utility less rock just to ask you a question. The opportunity to be with you is worth a substantial portion of my time.”

Time is the currency.

Luckily the romantic aspect doesn’t stop at the honeymoon. Beyond the above examples, we value time to be with loved ones, time to meet someone new, time to learn a novel concept, time to think about the little things, time to just be, time to make a card, time to do whatever you’d like to be doing.

The goal isn’t some dollar number out there. Well it is… but just like everyday currency, this is simply an intermediate step.

The lasting goal is time to do what you please. You trade your valuable and finite resource of time for things that will make your future better. Yet be careful, as there are a lot of things out there that appear to be beneficial, but in reality simply subtract away from your future freedom.

In the end, we’re all just looking for time: independence to do what you please. That’s the goal. That’s romantic.

Author’s Bio: This guest post is brought to you by Eli Inkrot over at The Currency Of Time. He recently quit his VP job to live more purposely, to live on his own terms. Hope you enjoy!

photo credit: wallyg via photopin cc