Money Value of Time

We often hear about the “Time Value of Money” as the concept that money today is worth more than money tomorrow because of the potential earnings we might get or opportunity cost we might forego during that period. It is less often that we hear “Money Value of Time” and which I feel is a more salient yet subtle financial concept.

A quick google search yields a couple of newspaper articles on the subject: An TODAY article about the author working in a corporate job and being a slave to time and his work obligations and a Huffington Post article on the cost to participating in any activity (even a free one!).

“Money Value of Time” is the concept that there is a cost to performing any activity, even a free one, because you are paying for it with your time. One might have heard of the story of Bill Gates walking down Pennsylvania Avenue and spotting a $100 note on the pavement but realising that it’s just not worth his time to bend down and pick it up. Apparently, because of how rich he is and how much he is earning, it has to be about $45,000 before it’s worth spending that time to bend down and pick it up. The majority of us are salaried workers and it’s quite likely a $100 note is still worth our time to pick up. But more crucially, are we spending good use of our time – whether it be in the jobs that we do or outside of work hours? Because time is a hell lot more valuable than money. As the old adage goes…

Time is more precious than money. Money once lost can be regained. But time once lost is lost forever.

Another perspective might also be relevant at this point. Imagine that you’ve been told that you won a lucky draw with a very special condition: You will be given $86,400 at the start of the day. You’re allowed to spend it on anything and in any way you want except save it. So if you have any change left at the end of the day, you have to return it. How would you spend this amount of money? Perhaps because this seems like a one-off event, you will think very carefully about how to make full use of it – like try something you’ve never tried before or treat yourself to a good break.

Now imagine that you’re told that you win this lucky draw of $86,400 every single day for as long as you can imagine. The conditions remain exactly the same though – you receive the sum at the start of the day and have to return the change at the end of it. Suddenly, it seems like there’s so much of it that you don’t mind wasting some of it on frivolous activities. And then out of nowhere, you get told that we will no longer be receiving the lucky draw anymore and have nothing to show for at the of it all. Unsurprisingly, that is precisely how some of us treat the 86,400 seconds that we have every single day, thinking that we have an infinite supply of time.

Time and money makes for very interesting parallel comparisons. I appreciated it a lot more when watching the movie In Time recently even though it was released in 2011. Long story short, each person on this sci-fi universe had a clock on their arm that counts down how long they have to live and time is treated as if it was a currency that could be traded. This means that the “poor” only have hours or days to live and anything more than a week is a luxury, while the “rich” are endowed with decades on their clock. The movie goes on to play out a number of economic concepts and human conditions that we see in our current economic environment today, like inflation and inequality. A very thought-provoking movie that kept me thinking about these abstract concepts every step along the way.

Some readers may think that the overall message is about not wasting time. That’s only partially true. Yes, there is a time cost to every activity we partake in. But I also think there is a time and place for everything, from studying and working to self-care and making precious memories with our loved ones. What I’m trying to emphasise is more about being intentional with how we want to spend our time. I’m sure we have all been guilty of scrolling through our phones mindlessly, only to realise that hours gone by and we come out of it only with feelings of procrastination and not at all well-rested. Such occurrences should certainly be kept to a minimal because there is so much more to experience out there in the world than living vicariously through our phones. So how will you be spending your next 86,400 seconds?


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