October 12 2010|12.09 PM UTC

Silicon Valley Blogger

Time: Your Most Valuable Resource

Category: Personal FinanceTags: ,

The Digerati Life is a personal finance site that offers tips and resources on saving money, stock investing and credit management.


Do you ever get the feeling that just as with money, you need to budget your time as well? While most people have thought that money is the measure of wealth, recent experiences have shown me that on the contrary, it is “time” that is our true resource. When we talk about wealth generation, our primary investment in that process is time. Let me show you how that is so:

  1. Time you spend working on a project is time you take away from either your family or in pursuing pleasurable activities.
  2. Salaries are measured by the hour for the most part. Most companies may have hired you with an understanding that you will work for them for around 9 hours: 8 hours of work, with an hour’s worth of break in between. That in mind, your salary is computed based on the number of hours of work you’re supposed to provide them. Thus, your worth to the company is actually measured by the hour.
  3. What time you spend on worthless activities, like playing computer games for hours on end, is time you take away from being able to finish that report and then go home and have a good meal with your family.

Thus, the saying “Time is Gold,” is truly on the money, pardon the pun. Having finally understood that, how do you respond?

Well, you can either ignore that thought and keep living life the way you want to, or start making adjustments. Here is our suggestion on how to make the most out of your time. This is for you to be able to peg down your schedule in order to make room and more time for the things that matter most.

Create a schedule and stick to it. Understand that we all have only 24 hours a day to administer, and once lost, it can no longer be retrieved. So apportion your time accordingly, and try not to let yourself abuse your time or your health.

Here are some tips on how to work on time management. You can call this a time budget:

  • Let’s state the obvious: we all have only 24 hours to work with.
  • Subtract the amount of time that you are willing to set aside to sleep. I go with 6. Our bodies reportedly need around 6 to 8 hours of sleep. I prefer the bare minimum.
  • Subtract the amount of time that you have to set aside for work. Let’s say your job states that you only have to render 8 hours of work a day, with a 1-hour break in between, reality usually runs counter to that. Either you discipline yourself and drop work pronto when the clock screams “TIME TO GO,” or allocate the actual number of hours you put in for work. If it’s 12 hours, so be it.
  • Set aside time for the preparations surrounding work. Give yourself around an hour to bathe, eat, and grab coffee before you go to work. Set aside another 15 minutes for preparing to leave work.
  • Set aside the number of hours it takes you to get to work. If it’s 15 minutes, congratulations! If it’s 3 hours, write it down, nonetheless.
  • Add this up, and the amount of time left is the only time you’ll allow yourself some leisure activities, such as to watch TV, play with your kids, or enjoy time with your spouse. In fact, this would be time left for you to unwind.

As an example, let’s see how an overworked guy’s day looks like:


Sleep:
6 hours
Work: 12 hours
Preparations: 1 hour 15 minutes
Commute:
3 hours
Total: 22 hours and 15 minutes
Time to do anything else: 1 hour and 45 minutes.

This is the picture of a person who seriously needs to do something with unloading his workload, not to mention moving someplace near work. Unless you’re willing to make major life adjustments, a lifestyle lived like this is not even a life at all.

A better alternative to working your butt off to get that promotion is to actually work more wisely. You could actually stay a few corporate ladder rungs above the mail room clerk and yet retire a near-millionaire. How? Instead of being a slave to the daily grind, you can instead work to cut back on your consumption and spending. Develop more frugal habits. Understand that you need a budget, both time and money-wise! You should work on shopping smarter using coupons and thus making your budget stretch further. If you plan to use credit cards, choose the best credit cards with no annual fees, low interest rates and other great features. And most importantly, focus on making wiser investments in order to develop passive income streams. Invest the time now to develop such streams and you can have your money work for you as well. Think about opening a brokerage account in a top brokerage such as Scottrade and become a passive investor in index funds. It’s about leveraging your time and money wisely.

Through budgeting your time and your money, you start to understand that these are limited resources. Once you come to terms with that, you’ll value it more and stop wasting it on time-killers like TV or computer games. When you shop more wisely, you get to stretch that limited budget and see some dollars go to better use, such as into investment accounts. You can invest beyond cash accounts and work on acquiring mutual funds or even stocks, which can help your money grow further.

So should you kill yourself over getting that promotion or use your time instead to work smarter? In the end, the guy with the $20,000 income but lives frugally and invests his money may very well end up richer than the guy with the $500,000 income but has to maintain 2 yachts, 4 girlfriends, luxury cars, and 5 homes from the East to the West Coast and needs to work 18 hour days.

photo credit: video4net and houseofsims

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{ 2 comments… read them below or add one }

Nick October 14, 2010 at 11:23 am

I can barely maintain one girlfriend, let alone four. :)

This article is, of course, spot-on. There are a lot of time-saving devises out there, though, from online banking to smart phones. A three-hour commute is killer, though. Imagine how much you could get done with the 15 hours a week spent commuting (assuming you only work 5 days a week, of course).

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Danny February 7, 2012 at 4:28 pm

I play computer games to relieve stress and prevent me from spending money at the bar and living an even more unhealthy lifestyle. I do not see the problem.

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