Making the Time and Money Connection
17. Jun, 2008 
18 Comments
This is part 2 of 5 on a series about my journey. You can read Part 1 here: Escapism: the Dirty Word that Keeps Us Doing What We Loathe. Stay tuned for Part 3 tomorrow.
If you think commenting on my blog precludes you from being quoted later, guess again:
“i have everything a guy could want:
- Badass Jaguar, Viper, Corvette (68), and lastly my prized shelby cobra
- A 7000sqft house, filled to the gills with cool shit like plasma TV’s, etc etc.
- King Air (it’s a plane guys, a plane)
- An awesome Wife”
Ok, beyond the fact that he lists his wife on a list of possessions, and she’s the last item on the list, I can completely understand where this guy is coming from.
From an early age we are taught that acquiring wealth is a sign of success. This cultural mindset often becomes apparent during travel. A westerner traveling to a country without modern luxuries might think, “Wow how do they live like that? They don’t have anything.” They might even wrongly assume that they are simple people, and admire them for their spirit, for the way “they smile despite everything…” Typically that “everything” is the fact that they don’t have significant wealth. We ascribe these qualities to them as a matter of condescension. “I could never live like that”. If you travel enough, you’ll find that these stereotypes are not always true. They are hustling like the rest of us. They are not simple and child-like, they just have different priorities. Of course poverty is a world wide issue, but is everyone without wealth, poor? Could it be they have something we don’t?
The person with the most stuff wins
My own path on the consumerism tread mill involved a beautiful house with an in-ground pool. My reasons for wanting a big house revolved around an over-compensation for growing up in an apartment and a sudden fit of nesting instincts. I genuinely thought that filling the house with art, books, modern furnishings and ‘stuff’ would bring me contentment. It did and it didn’t. The idea was wonderful, it felt great to think about. The reality of it was that I was never home to enjoy it.
At the time, I was working 60 hours weeks and commuting 2 hours a day. Besides the time I was at work, I was physically and mentally wiped out after work. I could switch jobs, find something less stressful, true. I eventually did change jobs, but not before I did some math that changed the way I thought about money and what I give up to get it.
What is your time worth?
We all trade our time (and knowledge, expertise and skills) for a salary. We assume we have to give at least 40 hours a week to a job, so we don’t count this time as ours. We give it away freely, without a second thought. But that time is ours, it’s a limited resource, and once it’s gone, there is no replacing it. I can’t beg, borrow or steal more time. It is, in fact, my life.
The Math
Say it costs me $100,000* a year to maintain this lifestyle. (*not my actual salary, just to demonstrate)
That’s $32 an hour at 60 hours a week.
If I lower my cost of living to $20,000 a year, I would only have to work 12 hours a week.
I was working 48 hours a week just to live in a big house, with lots of stuff.
Don’t get me wrong. I’m not against working hard or owning a house. But the idea that I was giving over 9 hours per weekday just to have an increased standard of living shocked me. Sure the house was nice, of course I loved swimming in the pool, but for that much of my time, I wanted more value.
From there I started breaking out the cost of everything by time.
Cable $100 or 3 hours a month
Car payment $375 or 11 hours a month
Name brand suit $400 or 12 hours
Fancy dinner $120 or 4 hours
And so on…
Lifestyle Redesign Phase I
This process hasn’t been overnight. For me to stop trading my time for things, I had to face the facts. We had to stop buying so much stuff! The End. (My husband had to talk me out of buying a book on “how to save money” and it took me a second to realize the irony). Inherently I already knew how to do it–reduce, reuse and refrain. Easy to say, harder to stick to…
Over the course of the last year we saved 50% our income. The next step? What to do with this financial freedom.
What’s your time worth?
They do these studies of native tribes in the amazon and found that for all their “primitiveness,” they only work like 10 hours a week to hunt and gather and what needs to be done. They spend the rest of their time telling stories and hanging out.
Not too bad..
Nomadic Matts last blog post..The Skills You Need
It also makes me think of the quote I have in my email: “be content with what you have, rejoice in the way things are, when you realize nothing is lacking, the whole work belongs to you”- Lau Tzu
Nomadic Matts last blog post..The Skills You Need
If that guy sold his badass cars, plane, house, etc. and invested that money he might actually be able to buy that stuff back in 10 years and have time to enjoy it. Think about it this way, if I offered to give you all that stuff, but I wanted 10 years of your life in return would you do it? Of course not, but if you spread it out over 50-60 years, as our society does, most people don’t realize they are giving that much of their life away.
This post hits home with me.
Chad @ Sentient Moneys last blog post..Financing a Start-up
Lately, we’ve been looking at everything with new eyes. The first thought before purchasing anything now is ‘will it fit in your backpack’? The second thought is ‘how many days in Thailand/Chile/Turkey will this pay for’? These thoughts have certainly curtailed our spending dramatically.
I’m looking forward to coming home after our year away and seeing how else our consuming habits have changed. One thing I know is that, quite likely, we now live in the nicest home we will ever have…only b/c I don’t think I will ever be willing again to have such a mortgage debt. It’s not that time is money, but that money really is time – if I can live on less money, I can spend less time working.
Interesting point Matt, about the native tribes. I have always thought that we work because we always have (‘we’ being humans). Now we work for companies to make money to survive, whereas before we ‘hunted and gathered’ as work to survive. I wonder where the 40 (or 50, or 60) hour work week evolved from.
I think the goal is to be like Julie (from the previous post’s comments) who seems to have managed to combine her passions and her work so that it is seamless. I’m not against working, but I would rather work for myself doing something I love – now I just have to figure that out!!
Gillian-
I was just reading Christine’s post and thinking how I calculate my expenses in terms of pages written or edited (the job that pays the bills). When I’m about to buy something–anything–I really do stop and think: How many pages is this going to cost me? At about four or five pages an hour (a formula my husband figured out)… well, you do the math.
But it’s funny… when I had a “real” job, I never calculated anything (except the money being taken out of my check each week). I had a colleague, though, who had a better degree than all the rest of us and was also paid less than the rest of us. He was justifiably pissed abou the situation, and so he sat down to calculate how much his work was worth. He decided he was really getting paid for about two hours of work. So he led one group therapy session for patients a day and then he went into his office, shut the door, surfed the Internet, and played video games for the rest of the day. I’m not saying that’s right, but I am saying that no one is going to value you the way you think you should be valued and sometimes you have to figure your out your own worth, which, as Christine says so well here, is about money. And also not.
Julies last blog post..Discover Lovely Long Island City!
Ditto to Julie. As a professional blogger, I calculate cost for everything in terms of, “How many stories do I need to write to pay for this?”
It makes life much simpler. I write for the money I need and the rest of the time I hang out and enjoy my life
Kyles last blog post..Filtering Chileans
Its funny. In college, when I was paid hourly for jobs like waitressing or working at a bookstore, I would totally calculate out how many hours I would have to work to pay for something. Sure I want that new $50 sweater, but that means that I worked 5.714 hours to pay for it. Hmm…. I’ll pass.
However, since I’ve had a salary, the money=time connection has ceased to exist for me. It doesn’t matter how much I work… the amount of money is still the same. Therefore, it doesn’t matter how much the consumables cost… they just add up to some equally nebulous figure.
Thanks for making me think about this. Now I’m going to figure out how much money I make an hour. I’m quite curious.
Ambers last blog post..Finding things
Oh, Amber, don’t do it. You’re likely to be very depressed!
That’s what sent my friend into a calculation frenzy… and then left the rest of us picking up the work he decided he’d no longer do because his salary really only paid him for two hours a day!
Julies last blog post..Discover Lovely Long Island City!
Great post! Something I’ve learned to put in perspective (in addition to the amount of time I have) is that I will make $X in my entire lifetime. I will only make that number… and every time I spend on something, I’m giving away a little bit of $X. When I think about it like that, I really do rethink what I’m spending the money on. Not to make a Sex and the City reference… but does anyone really want to be Carrie, sitting in a shoe store realizing they have $40K worth of shoes, but nowhere to live. I know that I don’t.
It’s great to read about your experience… and the decisions you’ve had to make along the way. All good reminders.
You can use the time/money logic when people ask you why you would spend so much money to travel. Before leaving for France everyone was like “It’s so expensive, why would you go there! You’re not going to be able to do anything!” My answer was always “Why would I give up an amazing life experience that I will remember forever just because of a poor exchange rate?” Some people just look at the negative in every situation. They can stay at home with their dollars in a safe place, I’ll go check out France, thank you very much!
Tanyas last blog post..
Gillian I don’t think people are working to survive anymore. Well, lots of people are, but many are working to consume things they don’t need. I think the key is figuring out what you actually need to survive and then figure out the things you want and see what that costs you. Some people want stuff, some want travel. The key is finding something you love to do to get the money to survive and that bit extra to enjoy life. It helps if you’re still enjoying life while you’re working rather than dreading every second you spend there.
Christine I spent some time picking fruit in Australia and New Zealand and trust me, when you start thinking of things in terms of bins, spending falls drastically. We got about $25 per bin of apples, pears or whatever and those bins were MASSIVE and took a lot of effort to fill. The 425 suddenly has new meaning when you think of the sweat it took to earn it.
Kirstys last blog post..Addicted to Tim Ferriss (Four Hour Work Week Guy)
The technical name for this in economics is “opportunity cost,” and it’s one of the first things you learn in ECON 101. Money is not significant in and of itself, it is a stand-in for ability to buy things, and yes, we gain it through giving our time.
However, this is what I found rather interesting: Economics approaches this same exact idea from the absolutely *opposite* approach. To wit: you’re *capable* of making $32/hour, so when you take off an hour of work, you are actually *paying* $32 for that single hour off.
No wonder you get all these economics graduates working 90 hours a week and feeling completely miserable! They think that they’re paying money whenever they’re relaxing. Whereas you have the right side of it: You pay for your possessions with your time at work, and are losing something fundamental about life whenever you give up leisure time, rather than that you pay for your leisure time with lost money.
One thing I loved about the middle east was the attitude towards work. Most Arabs we met “work” long hours, but it’s mostly an exercise in hanging out. For many people, working means being within sight of your place of business while playing backgammon with a neighbour. Even jobs like bus drivers would often have a friend or family member along for the ride just to provide company. It was simply a different way of life.
This really struck home when we ran into the owner of a coffee shop in Jordan, who spends his summers in the same city we’re from. When we arrived at his shop, it was open but entirely empty. We were about to leave when he came running over from across the street to serve us coffee and donuts. Clearly, he made enough to enjoy a decent lifestyle allowing him to move between Canada and Jordan twice a year, yet he was far more relaxed than most anyone we know.