Time and Money! We all know that time is inherently limited. But if we are having a similar thought process for money, then we are living in a false world.
‘Money is limited in the world’, this is the prime base for traditional retirement and personal finance advice. The vast majority of personal finance advice out there is focused on cutting back and spending less. It doesn’t acknowledge the simple truth that money is limited only if you don’t try to make more of it.
Money is inherently infinite. It’s a human invention, and as long as people are helping the economy grow by working, spending, and investing, governments can print more money to keep up. There is and always has been a massive gap between those who have a lot of money and those who don’t. But in theory, there is enough money in the world for everyone to have all the money they need.
The problem is, many people don’t take advantage of available opportunities. They accept whatever money they are given—generally whatever their companies are willing to pay—without considering other ways to make more money. They say they want to make more money but spend all their free time binging on smart TV with many subscriptions, gaming, surfing, etc.
When we believe that money is scarce, we end up sacrificing a great deal of time in order to make and save it. And unlike money, time is inherently limited. If we believe money is scarce, we will spend precious time trying to save it when we actually don’t have to. We’ll spend hours clipping coupons or hunting for a deal online just to save a few bucks off our bill.
The same goes for earning money: every minute we spend trying to make money is a minute we can’t use to do something else—it’s gone forever.
“A man who dares to waste one hour of time has not discovered the value of life.”- Charles Darwin
Available time with us
Most people work between 70,000 and 80,000 hours over the course of their careers. Even these stark numbers don’t tell the whole story. Standard working hours of countries worldwide are around 40 to 44 hours per week. If we add in time for commuting, that’s about 50 hours. There are 168 hours in a week, so after you subtracting 50 hrs and also about 56 hours for sleeping, you left with 62 hours.
That sounds like a lot—more than double what you spend working in a week—but consider that not all hours are equally valuable. Studies have shown that we are most alert and energetic early in the day, but that’s the time we’re usually working. By the time we get off the clock, we’re usually so tired or run down from working all day and commuting that we don’t want to do anything except sit on the couch. This is why the average watch time of TV is around 2.8 hrs per day across the world & lead by America as 4.5 hrs per day.
We have weekends, but how often do we spend those running around trying to catch up on all the shopping and chores we didn’t get to during the week? The point is, we are trading the best hours of our week and our life for money. Many a time it happens even when people do not love their work. There is a huge difference between working at a job you hate, being stuck at a desk or on the clock for forty or more hours a week, and doing work you love and are passionate about, on your own time, and having the freedom to do something else if you want to.
Power of compounding
It’s your TIME, so take control of it. If you take advantage of opportunities to make the most of your money, you can save a lot more money and correspondingly even more time. Every penny invested today is worth hours, if not days, of your freedom in the future. The more you save today, the more time you buy in the future.
The earlier you start and the more you save, the sooner you will reach financial independence. This strategy will rapidly decrease the number of years and the amount of money you need to reach financial independence. Remember: The key to fast-tracking financial freedom is to make and invest as much money as early and frequently as you can. Actually, it happens with the power of compounding interest.
Albert Einstein once described compound interest as the “eighth wonder of the world,” saying, “he who understands it, earns it; he who doesn’t, pays for it.” Compound interest is when the interest one earns on a principal balance is reinvested and generates additional interest. Click here to learn more about the power of compounding with real-life examples.
Fortunately, the relationship between money and time is not strictly linear. If you want to make more money, you don’t necessarily need to sacrifice more time to do so. You don’t have to be limited by your own hours or even the hours in the day. You don’t have to look far to find examples of people who can work half as many hours to earn twice as much money as someone else, and it’s not always because they are smarter or more experienced, or work in a more lucrative field. Even you can find people who make money by trading very little, if any, of their own time because they’ve invested a lot of time up-front in building consistent long-term income streams.
People who invest their money in the stock market, real estate, etc. get leisure time in life as their money is working hard to earn money 24×7. This is known as a passive source of income because they don’t have to actively do anything to earn it, and it is the ultimate money-making strategy. What’s better than being able to make money doing literally nothing? Even the best part is they get relatively more time to evaluate their investment plans to get the best returns.
Once you reach the point where you no longer have to trade your time for money, you can choose to spend that time however you please. When you have enough (or even just close to enough!), you can quit the higher-paying job you hate to take a lower-paying one that is meaningful to you. You can explore, grow, give back, follow your passions, and find new passions. You can travel the world, pick up a new hobby, learn a new skill, volunteer—the possibilities are infinite. (Excerpt is from ‘Financial Freedom’ by Grant Sabatier)