Time Is Money. And Money Is Time.

You’ve probably heard the saying time is money. As weird as it sounds, it was one of my favorite concepts growing up.

As a teenager, my first jobs were hourly paid. The more hours I worked, the more money I made. If I didn’t work any hours, I didn’t get paid anything. Back then I took the phrase ‘time is money’ quite literally, and it motivated me to work harder and earn more.

Today however, I am learning that the flipside of this phrase can be equally motivating. Money is time! By this I mean that if you’ve saved a lot of money, you can potentially buy hours of free time in your life. (Not more time — we all get the same 24 hours a day — I’m talking about free time, as in freedom to choose how you live.)

“Remember That Time Is Money”

Apparently Ben Franklin said this first, way back in 1748 when he published a short essay called Advice to a Young Tradesman. Here’s a snip from the paper…

Remember that Time is Money. He that can earn ten shillings a day by his labour, and goes abroad, or sits idle one half of that day, tho’ he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent or rather thrown away five shillings besides.”

I’ll admit I had to re-read that passage about 6 times to decipher Franklin’s old-school (and gender bias) writing style. But what I think he was trying to say is:

  • If you earn $10 dollars for each day of work, but choose to take a day off, then that day just “cost” you $10. (Opportunity cost)
  • Also, if you take the day off AND spend $5 buying something, in total, the day cost you $15. ($10 in opportunity cost + $5 in real cost)

So, basically, we should all work 365 days out of every year, right? Every second we’re not working, we are wasting money?

Well, probably not. Although it’s important to understand opportunity cost and make money while you can, it’s also important to find balance.

Taking the Concept Too Far

Back when I was 20, I worked as an hourly paid employee at a cellphone store. I can’t remember my exact wage, but it was probably like ~$16 per hour (this is Australian Dollars, so maybe like $12/hr USD). I worked 5 days a week, so my take-home pay was about $130 each day before taxes. That’s about $33k per year.

Since I was a money-hungry little bugger, this wasn’t good enough for me. And since I didn’t yet understand the concept of higher value labor, I decided to trade more of my time for money at a second job, after hours. My mindset was simply, more hours working = more money.

My after-hours job was at the Australian Post office, working 7pm to 12am sorting mail for $18 an hour. Daily, that was ~$90 before taxes, so $23k per year.

All in all, with both jobs that’s $56k before taxes, working ~60 hours per week. Decent coin for a 20-year-old! At first I was loving it! Knowing that I was maximizing my time and not missing out on any opportunity to work felt great. 

But, as you can imagine, it eventually led to burnout. Prioritizing money too much and giving all my time away was unhealthy. I learned a huge lesson during that time in my life → Although time is money, sometimes the money isn’t worth trading the time for.

Another cool thing I learned during that time…

“Remember That Credit Is Money”

This saying comes from Ben Franklin’s exact same essay, right after the “time is money” bit. He continues on to say:

Remember that Credit is Money. If a man lets his money lie in my hands after it is due, he gives me the interest, or so much as I can make of it during that time. This amounts to a considerable sum… Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more, and so on. Five shillings turn’d, is six: Turn’d again, ’tis seven and three pence; and so on ’til it becomes an hundred pound.”

Again, I had to re-read this a few times to decipher it… But I’m pretty sure that Franklin is talking about compound interest! His lessons here are:

  • Money can make more money, compounding over time.
  • The earlier in life you make money, the more compounding can happen.
  • So if you miss work for your $10 of pay, it not only costs you $10… It also costs you the potential compounding over and over again throughout life.

Bottom line: Time is waaaay more money than most people think … because opportunity cost also has compounding value.

I was lucky to be exposed to investing at an early age. It took a good decade of saving and buying assets, but I was finally able to shift my mindset from trading time for money, to using my assets to generate money.

Money Can Buy Free Time

When I say you can “buy” time, what I really mean is that money can be used to remove regular obligations in life (work, chores, inconveniences), freeing up your time so it can be spent in more fulfilling ways.

My friend Christine Luken dropped a cool comment the other day on the blog. She said:

“One thing I will add is something I do called “Buying Back My Time.” It’s the rule I use to figure out if I should do something myself or pay someone else to do it. Essentially, I calculate how much time something takes me versus how much it costs me to pay someone else to do it. For example, my cleaning person takes 10 hours of work off my plate per month for the low, low cost of $160. (She only needs 6 hours to get it done because she’s that good.) All I need to do is sell an online course or to book one 60-minute corporate money wellness webinar to pay for my house cleaner. $160 to buy back 10 hours of my time is an amazing deal for me!”

Outsourcing work gives you more free time. But in order to do that, you have to have money to pay for it. In Christine’s case, she can pay for 10 hours of free time for $160. (And she also worked out that she can make $160 in 1 hour, or by selling a book.)

Achieving financial independence (especially at an early age) can give you HUGE amounts of free time in life. If you’ve saved up enough money to cover your bills and conveniences for the rest of your life, you’ve just “bought” free time for the rest of your life.

Time Is an Asset. And Money Is an Asset.

All in all, both time and money are assets. It’s up to you on how you want to use them in life.

I promise this is the last Ben Franklin quote I’ll use for a while! This is from the final paragraph in his essay…

“In short, the Way to Wealth, if you desire it, is as plain as the way to market. It depends chiefly on two words, Industry and Frugality; i.e. Waste neither Time nor Money, but make the best Use of both. He that gets all he can honestly, and saves all he gets (necessary expenses accepted) will certainly become Rich.”

Agree? Disagree?

Wishing you all a lovely week ahead, spending your time and money in awesome ways!

Love, Joel

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  1. Financial Samurai September 27, 2021 at 10:00 AM

    Makes sense to me. And as you get older, the more you a value time over money. Probably because your best time, and partly because you have more money.

    My motto for the next decade is, “do what you want!”

    1. Joel September 27, 2021 at 10:38 AM

      Nice motto! You’ve certainly earned it :)

  2. Ben September 27, 2021 at 11:33 AM

    Love it! Thanks for sharing this Joel. Reminds me of one of my favorite Thoreau quotes:

    “The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run”

    Thanks for highlighting that it’s a two-way exchange rate!

    1. Joel September 27, 2021 at 12:03 PM

      Cheers Ben! Nice APP by the way!! Love the time component as it’s a huge driver for Financial Independence.

  3. Maria L Ayres September 27, 2021 at 2:24 PM

    One of the added benefits, I have found, is the stress relief in paying someone else to do a chore. I have my yard mowed, weed whacked and cleaned up; knowing it is going to be done every week is a great stress reliever to me. Not spending my free time on it; I have 1.5 acres, but knowing it will still look lovely is worth the price.

    1. Joel September 27, 2021 at 2:28 PM

      Getting rid of stress is for sure worth spending $$ on! Good one Maria!

    1. Joel September 29, 2021 at 11:55 AM

      Freaking amazing. What a legacy to leave. Makes me want to do the same kind of thing and come up with a good 200 years plan.

  4. Angie October 28, 2021 at 4:27 PM

    Agreed – time is definitely money. And I’ve been guilty of taking it too far myself by doing a day job that was already paying 6 figures and sneaking off to drive Lyft while working so I can earn a few extra books. I’d also keep driving until like 2-3am at night, having to wake up the next day to get to work lol.

    And then I realized that I really should only trade time for money if one unit of time equates to much more money than I can currently make at my W-2. Otherwise, I’m burning my otherwise free time as diminishing returns on money I feel like.

    1. Joel October 29, 2021 at 9:10 AM

      Great realization, Angie and you’re right about diminishing returns!