We often look back at how much we earned in the previous year, but have you ever looked at how much time was taken away? If you don’t prioritise your time, you’re not paying enough attention to your most valuable asset.
As financial advisers we often talk about the need to cover yourself for life’s unexpected challenges. One common mantra that I hear a lot in the industry is that your biggest asset is your ability to earn an income.
Now, I agree that earning an income is fundamental to the most basic of needs in our modern world, but I think there’s something far more valuable: your time.
It’s our most valuable asset. Time is more important than money and it’s the one level playing field that we all have in common. No matter what our income, profession, capabilities, experience, or intentions, we can’t magically create more hours in the day or days in the week.
When I was at uni, living in coastal Newcastle, I had all the time in the world to surf, party, road trip, but I had very little money to facilitate the fun. I was time-rich and cash-poor.
Then I hit the real world and started earning. Good times. I think everyone can relate to that first year earning money in your 20s and that sense of euphoria. Suddenly you have all this money and can spend it however you want. As I climbed the ladder, the bank balance went up, but I quickly realised my available time to do all the things I loved disappeared like a fart in the Sahara.
All the money in the world is useless if you don’t have time available to enjoy it.
I found in the corporate world it was easy to be sucked into the delusion that earning ‘more’ was actually giving me more. I wasn’t taking notice of what was really being taken away. Having a sufficient life involves balancing the two.
At tax time you look back at how much you earned in the previous year, but have you ever looked at how much time was taken away? Are you prioritising the wrong things? Are you ignoring your most valuable asset?
Value how you spend your time
You don’t get issued a tax invoice for all the hours in your life for the past year and how you spent them. What was the split between work, family, friends, giving back, or everything else you need for your sufficient life?
This worldwide issue is one of the reasons so many people aren’t happy and spend their entire lives on the hamster wheel. Earning, spending, earning and it goes on.
Understand that time is your most valuable asset. A financial planner friend, Phil, made this video discussing this exact thing. He references everyone’s favourite, Justin Timberlake, and his 2011 movie ‘In Time’ where the time left in life ticks by on your arm. He notes that it’s important to design your lifestyle so that it reflects what you value you most.
Here my thoughts on how you can get the balance right and make the most if it.
I believe that there is nothing wrong with buying material items when it makes sense for you. For me, outside of absolute necessities, these are things like surfboards and a car to get me to the beach.
However, if you make a conscious decision to prioritise experiences over collecting unnecessary stuff, you’re using your time better, without the need for lots of money.
Whether it’s bushwalking a new track on the weekend, learning to fish, turning your hobby into a side hustle or hanging with friends you haven’t seen in years, the time factor is amplified. Although some of these will cost money, you’re making your time matter.
Subtract the crap
If you pour money into buying material things, accumulating these things over time is even worse.
They take up space in your home as well as your mind. This makes this dilemma two fold: you are increasing your need to earn money to keep up with your material wants, while simultaneously killing your available time.
Practise the YOLO life
You only live once. We still get the odd chuckle when people realise we initially called our financial planning and home loans business YOLO. It’s unreal!
Some would deem this a corny name, but we took the risk in this notoriously stiff profession because when you boil it down, it just makes sense. Think about it:
You. Only. Live. Once.
Make the most of your time and don’t let anything else, especially money, get in the way of that.
Make decisions based on the fact that your time on this earth is limited. If you don’t live for today, you may miss out.
Get the split right
A good starting point here is to define what is sufficient in your life and ensure this is what you’re directing your money towards. For example, if your family is your life, but you get very little time with them. Your need to make some changes.
Next, use a service like Rescue Time to keep track of everything you’re doing. It’s essentially a time audit.
Once you’ve defined what makes up your sufficient life and you know where you’re currently spending your time you can make the conscious decisions necessary to save more of what you earn. This will enhance your life outside of work or, if you choose, fast-track your ability to step away from the hamster wheel.
Use your cash flow to create time
If you spend your life frugally squirrelling away money and avoiding spending at all costs, you might forget to enjoy life.
Yes, you’re saving money and this is nothing to be sneezed at, but if you have the available income and you’re lacking time, there are some areas that I think you should consider spending a few dollars. Think things like self-education, or like one of our friends, outsourcing all of their laundry to Airtasker.
This is counterintuitive to many, but it’s a mental barrier you need to overcome if you’re going to get the most out of your most valuable asset. Give yourself permission to drop a few bucks on something that will save you the time for things you truly value.
Create a business not reliant on you
If you charge by the hour, you’ll find it very difficult to remove yourself from the time-equals-money equation. Stop and think about how you can create a product or service that is more valuable and can be replicated. This way you’ll get paid far more for your time.
Remember that time is your most valuable asset – keep it in perspective. As Phil says in his video, you need to have some funds available. You can’t just sit on a beach all day drinking margaritas. But our time on this earth is limited and money isn’t everything. If you can create a better balance in your income vs time equilibrium, you may just find that those mini cocktail umbrellas aren’t that far out of reach.
This is an edited version of an article that originally appeared on Sufficient Funds and is republished here with permission. This article contains general information only. This should not be relied on as independent finance or tax advice. If you are after specific professional advice, speak to your registered tax agent/financial advisor or reach out to James at Sufficient Funds.