This is one of those simple concepts that once it clicked in my mind, I could never go back to my old way of thinking. The phrase “nothing in life is free” is thrown around a lot, but I don’t think most people take the time to stop and think about that fact. My goal is that after reading this you will have a firm grasp on the REAL price you pay for everything you choose to do in life. Hopefully this powerful lesson will change your life like it’s changed mine.
Why a Free Handout Isn’t Free
I can say with 100% certainty that you have to pay for everything you receive in life, even if it’s a free handout. I’ll explain.
Let’s say you decide you want to start a side business that generates $100,000 a year, in an industry that you know nothing about. You’re going to have to invest a significant amount of time, energy and money to accomplish that. On the other hand, let’s say a generous family member decides to start paying you $100,000 a year with absolutely no strings attached. Well that that sounds nice, but you are still paying for that “free” money. What you’re paying is the knowledge, experience, networking contacts, etc that you would’ve gained from starting that side business. Those are skills that you could benefit from at your day job or that could be used to create more businesses.
This is what’s called opportunity cost in economics. In the scenario above, you are exchanging the opportunity of gaining a valuable skill set for easy money. Of course that’s not a realistic scenario, but I wanted to make the point that even handouts have a price.
Opportunity cost is something we need to be aware of, but it isn’t the most important currency. In fact, often closely connected with opportunity cost, is our most valuable currency of all – time.
The Currencies You Use
The first currency that comes to mind is obviously money. If you want food to eat, a roof over your head and a vehicle for transportation you’re going to need money. Most products and services are available exclusively through the exchange of money.
You can learn a lot about yourself by analyzing your credit card statements. Where do you spend money most often? What items do you spend the most money on? You may be surprised to find that you are spending way more money on certain activities than you thought. If you’re lucky you’ll find that you don’t spend nearly as much as you thought on some things.
Side note, for those interested in taking control of their personal finances, there are tools that can help you. Mint is a free service that helps you set budgets and track your spending. I have used it in the past and it is very simple and straightforward. Another service I’ve seen recently (not free) is called LearnVest, which might be more useful for those that need accountability. I have never used it, but I’ve heard good things.
The good thing about money is that you can always make more of it, even if you lose it all at one point. Just look at Donald Trump.
The other major currency we spend is time. Just like money, we can learn a lot about ourselves by looking at how and where we spend our time. Also like money, there are even tools for tracking our time as well. Checkout this service called Rescue Time, it allows you track all your time spent online. They have a free version of their service with limited features and a $9/month premium service for those who need the extra help staying productive throughout the day.
The problem with time is that once we spend it, it’s gone forever.
Time is More Valuable Than Money
In real life, the currency we most often pay is time. Unlike money, time is the only currency that has a definite expiration date and decreases by the second for the duration of our entire life. We can always make more money, but time is limited.
You can, however, try to max out your time limit by focusing on living a healthy lifestyle. For example, if you smoke cigarettes you could probably add some years immediately by stopping that one habit.
You can use your time to make money, but no amount of money can buy back time you’ve spent.
For every hour you spending surfing the web at work, that’s an hour of work you didn’t get done. For every hour you work at a job you hate, that’s an hour of your life that you never got to enjoy. For every hour you spend in a bad relationship, that’s an hour you can’t spend with the woman of your dreams. You get the idea.
But I have to work this job I hate to pay the bills….
Bullshit. You choose to work the job you hate because for whatever reason (you’re scared, you don’t have the right degree, you don’t know anyone in that industry, blah blah) you refuse to take the necessary steps to go after what you TRULY want.
If you work the typical office job then you are most likely paying 40 hours of your time a week (87 days of the year, 9.5 years over a 40 year career) for that income. That’s a huge investment. Are you getting the return you’d like? For almost a decade of your life directly invested, I sure hope so.
Invest Time and Spend Money
I’m not a lavish spender, but I love spending money on things that save me time. For me, time truly is my most valuable currency and I hate to see it get wasted. I hate “spending” time. Time spent doing anything I enjoy isn’t time spent, it’s time invested because I get something in return. Time spent is work and that’s no fun. I’d rather spend money than spend time.
If I’m watching a movie that sucks I will turn it off as soon as I stop enjoying it. I’ve turned movies off with less than 20 minutes left before finding out the ending. I have no problem walking out of a movie theater – you gotta know when to cut your losses. When I watch a movie I am investing my time in that activity, in hopes of getting entertainment in return. I can’t get back the first hour I wasted, but I can at least go enjoy the next hour of my life. I let the suckers stay behind to “get their money’s worth” while I go invest my time elsewhere.
To start living life on your own terms you have to change the way you pay for the things in your life. I could pay someone else to write this content for me, that’s what most bloggers do. (Seriously, just Google “outsource content writing” and see how many companies offer that service)
However, I like writing and I believe in the content I write about because it’s all inspired from my own life. If I didn’t like writing I wouldn’t even mess with blogging, despite the money that there is to be made. I would just invest my time in something else that makes money that I enjoyed instead.
Now accounting on the other hand, I hate and I would rather pay someone else to handle that for me so I can spend my time doing what I enjoy. I don’t like ironing and I tend to ruin my nice clothes in the laundry so I spend money on dry cleaning. Some people (not sure who) might enjoy ironing clothes and wouldn’t mind investing their time in that. You see what I’m getting at here? Invest time and spend money.
Your Time and Your Job
You shouldn’t be working a job you don’t enjoy, even if it pays a lot of money. If a company is willing to pay you for what you do, then that is validation that your time is worth something right? They wouldn’t be profitable if their employees didn’t generate more revenue than they cost to be paid right? So why not cut out the middle man and start working directly for customers, instead of working for an employer? Of course freelancing is hard work, but so is anything worthwhile. If you’re going to be doing something you don’t enjoy, at least be in a position to hire other people to do that work for you and then spend your time elsewhere.
Maybe entrepreneurship isn’t your thing, that’s ok. You should at least be doing something you enjoy, because you can’t master a career you don’t enjoy. Sure you might be paid well now, but look at the long-term potential. The best people get paid the most, eventually. Become a master and the money will come pouring in, plus you’ll be happy.
This isn’t just about making money, you can invest your time in anything that adds value to your life. Placing a monetary value on time just gets most people’s attention quicker.
The important point is that the less time you waste, the more time you have to be with family and friends, to enjoy hobbies and to take advantage of opportunities you might usually be “too busy” for. Wealthy people don’t pay others to clean their homes, do their laundry, drive them places, etc because they’re lazy; they pay for those things so they can invest their time elsewhere. That is the ultimate luxury – the freedom to spend your time however you want. So you see the importance of making money when it comes to freeing up time.
Invest your time into getting what you want out of life. Spend money to free up more time to invest. Repeat.
If you live in an industrialized country and no one is holding a gun to your head, you really can choose how you spend your time. You can’t get back the time you’ve already wasted, but you CAN start investing your time wisely starting now. Your death timer will continue ticking either way. So how are you going to start investing your time? Let me know in the comments below.
Until Next Time,
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