Twitter
Email
RSSTime Is Money
While on our transatlantic cruise our dinner table companions were 2 couples in their late twenties/early thirties that had quit their jobs and were trekking around the world. We had some great discussions about life and I gained a lot of insight in to how to travel more frugally.
One thing that stuck with me was the paradigm they operate in when spending money. They viewed time as an abundant resource as they had a lot more time than money. The decision criteria they used is very different than ours these days in which I consider us very time poor.
These globe trekking couples happily trade time for lower expenses in their journeys. Often they would go out of their way to trade a lot of time (sitting in the airport on standby, taking a local bus or walking versus taking a taxi, etc) to save just a little money in their travel.
It was really refreshing for me as I currently have a completely different view on time. I am time poor and now regularly make decisions to save time even if it costs me more money. Applying this to our financial freedom its a good reminder that when we get financially free, time will be an abundant resource and money would likely be a much more limited resource. We would likely make very different decisions when we are financially free compared to our current, very time poor, lives today.
It kinda reminds me of a propaganda sign that I often saw while we were on our temporary assignment in Shenzhen, China:
"Time is money, efficiency is life."
Related in Financial Goals:
A Better Financial Freedom Yardstick? (Feb 10, 2012) A key theme from the popular book The Millionaire Next Door is the simple formula to benchmark your expected net worth. Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This...
Mid-Way Point in Our Journey to Financial Freedom (Nov 11, 2011) I recently celebrated my 10yr anniversary at my employer and I realized we are roughly halfway through our journey to financial freedom (10 years into a 20 year plan). With our $2 million net worth goal as a guidepost and...
Financial Freedom Plan and our Net Worth Goal (Oct 05, 2011) I recently laid out our rough plan for how we plan to generate income once we become financially free. This plan suggests we'd be able to generate between $40k-$76k+ per year which should cover our annual expenses. Next I want...
Comments (8)
2million, are you really "that" time poor? I mean you have one child and your wife is a stay at home mom which helps. Imagine if you and your wife both worked and also had 2 kids or more. Then you might be a lot more time poor. Maybe it's all relative? But my brother has 3 kids and though his wife stays at home, they are still really busy. But not as busy if they both worked. Any comments?
Posted by Steve | January 16, 2012 4:23 PM
Interesting that you expect to have lots of extra time but little extra money when you're financially free...I guess that's one way to do financial freedom. My idea of financial freedom will be when I have the non-wage income to both be able to free up time AND to more freely spend. I guess it will definitely be a milestone when I pass my "minimum expense" crossover point on passive income, but my eventual goal is much loftier.
Posted by Jonathan | January 16, 2012 5:10 PM
It is funny how as time goes on we slowly transition from being more money conscious to being more time conscious. I used to do a lot of stupid stuff to save money, I would like to think I am wiser now but I am sure I still do a lot of stupid stuff.
Posted by KC @ PsychoMoney | January 16, 2012 8:00 PM
Steve, Its a valid point. I really don't know how people with multiple kids do it. I hear it can actually be a bit easier with multiple kids since they can entertain each other, but Im not sure I believe it. I definitely feel saturated, but its from a variety of things - overload at work, wife's part time work requirements, expanding honey-do list at home, quality time with kid, etc.
Jonathan, yes with a goal of only $2million I still expect $ to be a very limited resource for us. I'm willing to trade a more frugal lifestyle with some indulgences for early financial freedom.
KC - I wonder if our time consciousness reverts back to money conscious once we stop working?
Posted by 2million | January 16, 2012 9:05 PM
Wow, great point. I never thought about the change in the value of time once you no longer work. Right now I also consider myself time poor with 1 child and my wife also working. That will definitely change in retirement.
Posted by Paul | January 17, 2012 11:30 AM
Mmmmm, just read your sentence "with a goal of ONLY 2 million, I still expect $ to be very limited". That's interesting because only a very small percent of Americans even have that amount. To most people you will look like a king. I guess it goes to show how little most people have saved for retirement.
Posted by Steve | January 17, 2012 7:24 PM
To put that another way at a 3-4% withdrawal rate we are looking at $60k-$80k before taxes to live on. I don't see that as anything above a squarely middle class lifestyle. I am certainly expecting that $ will be a limited commodity and I will need to engage in several time consuming efforts (as most retired folks do) to keep our expenses inline with what we can spend. On the plus side I should be sleeping a lot more peaceful knowing that I don't have to work for or compromise for the man! Maybe to some people I will look like a king, one that still has to budget though. ;-)
Posted by 2million | January 17, 2012 7:39 PM
I would rather say that time and money are trade-offs, as long as you don't do what you really enjoy and what doesn't seem like work. Thanks for the nice reminder!
Posted by Valeriu | January 23, 2012 5:56 AM