Thought change: t=$ to $=t

Throughout our culture time and money have been linked. Traditionally, time has been the controlling factor of money. Meaning that time is the input and money is the output. The common phrase “Time is money”. Is often used to justify the value of time by equating it to a monetary figure. And in fact, many people are paid a time based rate, $/hr or $/year. After time has been changed into money the connection to the time input is lost for many. However, money is time. Money is the time to retire, the time to take FMLA, the time to be between jobs. Money is also the time to acquire a good. And money is seed to create more time.

It should be a “duh moment”, that the money that is saved in a rainy day fund can provide safety and flexibility on the need to be consistently working. For instance, if you spend $2k a month and have 8K in a rainy day fund you can at least lat 4 months without working. You have bought 4 months of freedom from being a wage slave! While the freedom of a break might not entice some, the freedom also translates to conduct in employment. If a boss or co-worker asks for an illegal task like providing fraudulent data for an SEC filing of a publicly traded company, you can say “please provide that request in writing” and “No”. You can afford to not be the fall guy for criminal activity. The freedom can translate into not having fear in asking for a raise, taking higher education classes, ect.

When I am making a decision on a purchase, I do some mental math to help me determine if it is worth it. I take my after tax rate per hr and divide the cost of the good or experience by the rate to get how many hrs of work it would take me to by it. Then I can truly decide if the movie, furniture, night out, snowblower, or what ever is worth it. Snowblower definitely worth it. Sometimes I go an extra step and try to relate the time of enjoyment to the time of work it takes to afford the purchase.  If I am going to have a long sustained level of enjoyment from the purchase, even if the price seems high, I will purchase. A snowblower is a good that fits this. The instant joy of a snowblower is low with a relatively high price tag. However, over the course of the many years of Michigan winters the trickle of joy from s clean driveway and lack of back pain due to shoveling adds up, making the purchase a good deal. By running through these calculations nights out with hundred dollar bar tabs might seem less desirable than not working in the future or another purchase.

Money has the unique ability to multiply through interest, dividends, appreciation, and profits. Money is like a farmers seeds that when deployed can yield profits. In the current crappy rate environment bank accounts are a poor place to place funds. However, with $15K  at 3% each month a bank account can provide about $37/month. See what happened there? A rate in $/time. $37/month might not seem like much, however, $37 is more than 2 hrs of work for many people. That is 2 hrs of work that was given for no effort other than not touching the money. If the $15K was deployed to about 8% a year in the stock market, that would be $100/month. That is a substantial amount of money which required no work and can be translated into retiring early or not needing to work to acquire funds for a purchase.

While society pushes time to money conversions and train-of-thought (probably to increase consumerism) , thinking of money as time and freedom may be a useful tool to evaluate priorities.

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