The sound of the clock ticking represents the dwindling of your most valuable resource – time.
Time is unique – you can’t get it back. Other resources like money, goods, and relationships can be rebuilt over time.
We all know someone who drives an extra 15 minutes to save 5 cents per liter on gas. To save $2.50, they forfeit 15 minutes (and some gas).
Math tells us that this doesn’t make sense unless we value our time at less than $10/hour.
This isn’t something to be ashamed of. Humans naturally undervalue time and overvalue money. One way to reduce this bias is to calculate the monetary value of your time.
The Time-Money Relationship
Time and money are interconnected. Investments pay you for putting your money at risk over a period of time, and you exchange your time for money at work.
“Money can be viewed as a means to move economic value through time.” – Ben Felix.
In the Ultimate Guide on Money, Happiness and Well-being, I discuss how money must be spent in very specific ways to enhance happiness and wellbeing:
- Buy time.
- Buy experiences.
- Amplify the scope of your purpose.
Money does not buy happiness and well-being directly, provided you have the basics of shelter, transport, food and clothing.
How to Spend Time to Increase Wellbeing
Imagine you have enough money so that you never have to work again. You have reached financial independence.
You decide to spend your time drinking on a yacht. After three weeks, you start to get bored and depressed. The boredom will ignite a desire for a new challenge. You realize that time spent on the yacht will not bring long-term well-being.
How you use time matters, a lot. You can use your time to improve well-being in the following ways:
- Engaging your knowledge, skills, and abilities to further a cause that you find meaningful. This involves responsibility.
- Improving your knowledge, skills, and abilities.
- Accomplishment – periodic feedback as you move towards a meaningful goal. This requires you to overcome difficult obstacles.
- Physical Activity (especially deadlifts…)
- Healthy eating.
- Building and sustaining strong relationships with others.
- Gratitude & mindfulness meditation.
The listed items are all difficult to implement. They require self-discipline and the formation of strong habits.
First, Save Time For Free
A massive net worth that permits Financial Independence will save you time as you no longer have to work for money. That’s a great goal, and I’m on this path myself.
But let’s also save time now, while we are on the journey to financial independence.
Here are 6 ways I use to save time for free.
1. Buy High Quality Goods
Think about the time you spend through the “life” of a car.
First, you spend time researching the car. You check out forums, go to a dealer, and research specs. After weeks or months of pondering, including spacing out during meetings at work, you make the decision.
Now you have the car. As it ages you devote time to maintenance appointments. Eventually, the car reaches a point where it is not worth repairing, or it becomes obsolete. Finally, you spend time disposing of your old car.
It is time to repeat the cycle, starting with the research phase for the new car.
I described the “lifecycle” costs of an item – from cradle to grave.
These lifecycle costs come in the form of time, energy and money. They apply to all goods that you buy – clothing, TVs, kitchenware, lawnmowers, snowblowers, ect.
Quality items have a longer lifecycle.
Therefore, you spend less time on research, purchase, maintenance, and disposal.
Quality goods save your time.
2. Live Close to Work, or Work From Home
There are 365 days per year, 11 statuary holidays (Canada), and 104 weekend days. I’ll assume you get 15 days of paid vacation. Cheap Chad works 235 days per year and has a 30-minute commute to work.
Chad spends 235 hours per year in his car.
That’s ~6 full 40-hour work weeks that Chad spends driving. I hope his seats are comfy.
Clearly, living close to work can save you a shitload of time. Financial costs of fuel, insurance, and vehicle maintenance can also be considered.
The Work From Home lifestyle brought about by COVID is clearly a best-case scenario to alleviate commute time.
Your home purchase decision, specific location and size, has ripple effects for decades to follow.
This decision drives a series of future costs such as commuting, property tax, utilities, mortgage payments, furnishing costs, and home maintenance costs.
You can learn more about this decision in my rent vs buy post.
3. Index Investing.
Researching, buying, and managing individual stocks takes loads of time.
Before buying a stock, good investors research individual businesses in detail, including balance sheets, income statements, and the company’s competitive advantage. After evaluating 10+ companies, you may buy one.
Once you have a diversified portfolio of individual stocks, you must continuously monitor the businesses that you own and adjust the portfolio.
Stock research and sustainment is almost a full-time job, hence why Warren Buffet spends nearly all of his free time reading.
After fees, most professionals fail to beat the market through stock selection. Under 4% of US stocks generate the net market return. And the net-wealth creation of the total global market comes from 1.3% of global stocks. The kicker is that you must find these gems before they become popular.
An index Exchange Traded Fund (ETF) or an Index Mutual Fund allows you to own nearly all the stocks (or bonds) that make up the stock (or bond) market. You increase expected returns while eliminating research efforts.
For example, the Total Market Index fund VTI holds over 3500 US stocks. You can learn more in this post on Index Investing: A Simple Way to Invest in Stocks.
This is why my portfolio consists of index funds that include over 10,000 stocks around the globe. Every two months I invest in a handful of index ETFs. I spend less than 5 hours per year investing.
I also find that index investing keeps me detached from my portfolio, limiting my behavioral biases. This is something I discuss here.
4. Compound lifts
Fitness is critical to a wealthy life. Good health allows you to make the most out of your time by improving energy and positive emotion.
Like investing, fitness and nutrition are simple but hard. Fitness, like investing, requires strong habit formation, not complexity.
A focus on basic compound lifts for strength is simple. Add in running or cycling for cardio. Now you’re set – that’s all you need.
Compound lifts work multiple muscle groups at once and are therefore time efficient. I’m talking deadlifts, squats, bench-press, rows, and overhead press.
You can superset some of these compound lifts if you are extra hardcore. An example would be bench and rows. I rarely superset with squats, and I certainly avoid supersets with deadlifts.
5. Meal Preperation
A large meal doesn’t take much longer to cook than a similar small meal. You can make a large batch and pack it up to have meals for multiple days.
“Scale of the economy” is the fancy MBA term for efficiency that comes with size.
Meal prepping helps you achieve the scale of economy in the following areas:
- Shopping.
- Preparation + cooking.
- Cleaning dishes.
Meal prep also keeps you from slipping into the easy path of buying fast food or easy cook meals. These easy options may save time, but they destroy your long-term health wealth.
In this post on 6 Ways to Spend Less on Food I cover this concept in more detail along with how to save on food waste and tips for smarter shopping.
6. Engineer Your Environment
I consider myself “disciplined”, however, I cannot resist a box of cookies that sit on my kitchen counter and stare at me as I walk past multiple times per day.
My solution is to keep the cookies out of the house – an easy decision made at the grocery store. I create a barrier between myself and the cookies.
Similarly, I sold my PS4, and I suddenly had 5+ hours per week in extra time that would have otherwise been devoted to Call of Duty.
I have engineered my environment to protect myself from time leeching activities.
You can do the same by removing time leechers from your environment. Examples include:
- Placing your phone in a different room so you can focus.
- Selling the TV.
- Selling your gaming console.
Notice that self-discipline is not enough. You need to engineer your environment to reduce demands on your self-discipline.
Conclusion
Time can be used for activities that bring you true well-being. This is why “buying time” by outsourcing unpleasant activities is one of the best ways to spend money.
But you can also save time for free with some decisions and habits.
Decisions to save time for free include:
- Buying a small number of quality goods.
- Living close to your work.
- Engineering your environment to disable time wasters.
- Index investing
- Compound lifts
- Meal prep
I hope this helps you save time. I’d love to hear your thoughts in the comments below.
