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# Time is NOT money–at least, not yours

Ramit Sethi · March 6th, 2005

I’m tired of people saying “time is money.” No, it’s not–especially not yours.

“Time is money” is a great excuse we use to pay more than we should. We justify paying extra for things like 2-day shipping, 1-hour photos, and taking cabs when we should just walk.

Thinking our time is money is really popular in America. It’s also dumb. There’s a fatal flaw people make when they say this: It assumes you’re earning money ALL THE TIME. That simply isn’t true. If you say “it’s worth my time to pay \$50 to have the flowers delivered,” you probably haven’t figured out exactly how much all your time is worth.

A good way of figuring this out is to actually calculate how much your paid time is worth. What do you make per week? Divide that by the number of hours you work and BAM, there’s the amount your paid time is worth. But then compare that to your total time in a week and see how the numbers come out. For example…

##### Quiz: What is your earning potential? Choose the answer you agree with the most

If you make \$800/week (after taxes) and you work 40 hours per week, each paid hour is worth \$20 to you. But factor in all the other hours you aren’t paid for (total weekly hours: 168), and you’ll see that \$800/168 means each hour of the week is actually only worth about \$4.75 to you.

2 things: When you factor in the realization that you’re not always working and being paid, your time isn’t really worth that much in financial terms. Second, \$20 here and there starts to add up. As a college student or recent college grad, you have more time than money. Would you rather have something tangible like \$20 in your pocket, or look back and say “Wow, it was worth it to have that extra 10 minutes?” Just think about how many Cups of Noodles you can get with \$20!!

“But Ramit,” you might say, “I value my time over certain things! Why must you come down so hard on me?” Actually, I agree. I’d just rather have you save your money for really important things instead of 2-day shipping. So unless it’s an emergency or something significant, stop paying extra for stupid stuff. And please, stop saying your time is money.

With that said, there are some people whose time is worth more than money. Senior executives and anyone else who works more than 70 hours per week, I’m talking about you. These people literally don’t have any extra time so they have to pay to get normal things done (dishes washed, laundry done, groceries bought, etc) so they can spend time with their family. At that point, it’s a matter of priorities. Also, if you are really old, who knows what might happen tomorrow? I might just pay for someone to do my shopping and laundry if I were an 88-year old grandpa.

Now what?

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Your time is worth what you can sell it for, therefore if the only time you can possibly make money is during the normal 40 hour work week than possibly you are right.

However, most people can, if they try find extra ways to sell there time. Like work overtime, or start home biz. I think that figuring out the aftertax rate at which you sell your time is an important part of bugeting. Why wash your car for an hour when you can pay some else to do it for a quater ofwhat you get paid an hour, unless of course you like washing your car.

2. ##### Jerry Kindall

Nah, your time is worth what someone would have to pay you to give up doing what you want, and this goes up as your free time gets scarcer. But that’s a justification for charging other people for your time, not for paying stupid amounts of money to save a little of it when you can just as easily wait. I mean, it’s not as though a two-day shipping upgrade actually saves you time, because you’re not going to sit there waiting for whatever you ordered to arrive. At least I hope you’re not! On the other hand, spending a couple hundred bucks to rent a trencher that will save you days of digging trenches with a shovel may be money well spent, because it does give you more real time.

3. ##### Jay

Actually, this phrase is one of the most important investment rules ever conceived. Warren Buffett lives by these words, and has ever since he began Berkshire. The words are not describing “earned income,” they are referring to the time-value of money…. the fact that getting a dollar today is worth more than getting a dollar one year from now. You should know why. It’s because you miss the compound interest of that lapsed time. And we all know that when computing compound interest, every penny, every day, and every percentage point count.

4. ##### Tom

First off: Time is NOT money.

Time is the MOST precious and valuable quality that you possess.

You can replace money. Money may have some value…but over time it gets eaten away…by inflation…or by…how do the storehouses term it…hmmm…shrinkage. Maybe taxes or other circumstances beyond your control may destroy this resource.

You can replace any thing that you have. Yes, even your relationships are replaceable although the investment of the TIME that you placed into them is not.

Once time is gone…it is gone…forever. You cannot relive the past. You can never regain “lost” time…(However time is never really lost…it is just spent…wisely or not.)

Some smart people will pay you…for your time. They will make even more money than they’ll pay you…for your time. If they didn’t you’d be spending your time doing something else. But that is what the smart do…they pay others for their time so that they can enjoy even more of the time that they have.

In order to do what these smart people do, you must invest your “spare time” wisely and determine a method so that you can hire others to spend their time to produce money for you so that you can spend more of your time to do as you wish.

This DOES NOT MEAN working for someone else. Working for someone else has never gotten anyone wealthy enough to spend their time as they please. So the computation of a “40 hour workweek” wages is nonsense…in my book at least. A waste of time…

That is the biggest problem that you’ll have…overcoming the need for the security of the 40 hour workweek job.

Now I will tell you the unadulterated truth…THERE IS NO SECURITY IN A 40 HOUR WORKWEEK JOB!!! It is a facade and a myth. Ever hear of the word…LAYOFF? How about the phrase…ECONOMIC SLOWDOWN??? While you are still fortunate to have your 40 hour workweek job you need to develop your business.

So you take your “spare time” (of course I don’t have any time to spare…not really, do you?) and figure out how to be an entrepenuer (spelling?).

Take your hobby and create a business…Do something that you love to spend your time on and develop a way to profit from it. If you invest your time, be creative and figure out how to take your hobby and create a business…then you might be in a position to hire others to market a product of your hobby for you.

Now, for example, I like collecting old coins. Gee…I wonder…could I open up a coin store? Or I like jewelry and gemstones. Could I open a jewelry store? Or I like cooking. (I don’t… but for example’s purpose…) could I open up a restaurant or maybe package Grandma’s recipes for her wonderfully tasting confections? I like photography. Will people need my services for taking pictures of their brand new triplets? I love to play my guitar. I wonder if the wedding next month could use a live serenade? Well maybe I don’t know how to play the guitar. But I know a few of my pals that do have a garage band and play for fun…maybe I can be their agent and book them for that wedding. I pay them well and earn a nice little percentage from them as their agent for that booking as well as a fee from the wedding director for booking them in the first place (Why not collect from both ends as the middle, for my time? And on top of that I get to enjoy the wedding reception party? Wow!!! Who could ask for more? Being paid to party…). Get the idea? Do you have any of your own?

Don’t quit your day job until this hobby/business is profitable enough to support you. And once you are in this position, and it grows to the point of here you need help then you can reap the benefits of hiring someone else to spend their time for you. You just have to provide the “security of the 40 hour workweek” (Remember that there is none…if things go south for your business you’ll just have to lay them off) paycheck for them since they are clueless on how to spend their time… wisely.

Then take another hobby and while the other person(s) is/are working for you, making wealth for you with their time, you repeat the process.

In this fashion you will do what you enjoy with your time and become richer while having others work for you with their time.

Well what if you fail? Then you fail. It is not the end of the world. The 40 hour workweek jobs are still out there. You will not starve and end up on skid row with the alcoholics and drug addicts (Now that’s a terrible waste of time…) Analyze what you did and where you made your mistakes…get up…and do it again without the mistakes the next time.

I’d rather ask what if you succeed? Then you get to spend even more of your time as you wish, happier and healthier. You’ll never know what will happen unless you take the next step and DO as I suggest.

5. ##### James

If I’m at home playing video games, and someone says, “Come mow my lawn”, I’ll say, “No thanks, time is money, I’d rather play video games than mow your lawn”. But if they offer me money making it worth my time, then I’ll do it.

So yeah, wouldn’t that imply that time is money?

6. ##### Vincent Orlando

Dividing your income by 168 hours doesn’t make any sense to determine your time value either, since whether you’re rich or poor you biologically need to sleep 6 – 9 hours every night. Why not round down to 100 (it’s easy division) and use that as the baseline? At \$800/week (after taxes) that makes your time a more realistic \$8 / hour rather than 4.75.

7. ##### Christopher

My boss and good friend told me that every thing is time OR money. If you don’t have the time to do something, you have to spend the money, or if you don’t have the money, you have to spend time.

8. ##### Q

You forgot considering that not every hour has the same “value”:

– I can not spread my tasks over the entire week as I wish (e.g. no one will go play basketball with me at 10pm on Saturday)
– I just don’t want to cook for hours after I skipped lunch to finish a project in time
– After giving a 4 hour presentation followed by a workshop I will not be in the mood to chat with friends

Great Blog by the way.

9. ##### AM

TIme = Money, still.

I somewhat agree with you, however, time is not only valued in monetary terms, but in terms of opportunity costs.

So, instead of doing this or that yourself, paying 10 bucks and getting it done, might be just worth it.

Furthermore, having one hour more to do what you like cannot be valued in terms of what you usually make per hour on the basis of total weekly hours, because even if you should merely earn \$5 per hour this way, you might be able to do extra work during this hour, getting paid overtime or delivering newspapers or whatever – and here you could get paid much more, no matter what you make weekly; this of course depends on your creativity and skills (assume you would teach students, help them with homework for \$10 each).

10. ##### Hasina

I agree with the opportunity cost argument. Time is money in the sense that what could you be doing with that 2 – day air mail if you got it two days earlier?

Would it mean a loss of money if you waited two weeks for it? Like, if it was a check or something? It depends also on the example you use. I think you incorrectly said that senior executives time is worth more than money. It’s just that their time is way higher in value, therefore, having someone who would do the dishes, laundry makes sense, because they could pay that person with five minutes of working time ( ie Oprah who makes 200,00 dollars a minute or some crazy figure like that).

If I could make 200,000 in a minute, there is NO way I would dishes, that’s a “waste” of my time. That is where the opportunity cost lies. It’s not a question of whether time is money, it’s not. Time is time. Money is money. The way you use your time reflects how much money you make/lose/earn/ etc.. That’s why time has a different value. What is an hour to someone who only has days to live? What is a minute to someone who is in the path of a tornado? In that case, time can be priceless. In economic terms, since everything has a “price” that is where the compounded interest, savings etc. makes a difference.

But culturally, if you ask a Masai from Kenya, how much is your time worth? He wouldn’t say “well, I make a minimum wage of 5.75”. He would say that time is ongoing and that he will enjoy it while he has this time on Earth. Similarly if you ask the Tamil Tigers of Sri Lanka, how much is your time worth, they wouldn’t talk about their day jobs or dreams of opening their own business. They would talk about fighting for the cause and continuing until they reach their goal.

I think that people use this popular adage that “time is money” because they are just trying to encourage people not to be lazy to get a job and work, and more importantly to not “waste” time and vice versa, to not waste money (because it reflects the time it took for you to get it).

Therefore, if we go by the colloquial usage, it’s just saying hey folks, don’t waste my time/your time, or waste my money/your money. We often lose the value of time because we feel like we have so much of it, simple sayings like this tie the mental concept to a very physical reminder of value – money.

11. ##### Mike McDougal

For me, time and money are very closely related. I make about \$55/hour. (Bonuses and things like that complicate it a bit, but that’s close.) I can work from home. There’s almost always work available. For me, it makes sense to pay people to do a lot of things. For instance, it makes no sense for me to do laundry. My condo doesn’t have a washer and dryer, so doing laundry wastes about an hour of my time. I can get the concierge to pick it up and have it done for \$10 to \$20 per week. I can’t do laundry in 15 minutes.