Your Time is More Valuable Than Money

Written by: Miles Clyne

The Value Of Time

Keeping track of time has been import from centuries. Through history there were important reasons for humans to figure out how to measure time. Early time pieces included the sundial and shadow clocks used by the Sumerian’s and the Egyptians. Then the Greeks came up with the water clock. Telling time made it possible through the ages to be able to plan activities like farming, sacred events, or anything else that was important.

Keeping time is one thing, but our perception of time is another. Lots of different factors like our age, mood and activities we are engaged in will give us different perceptions of time. IE: Time flies when you’re having fun. Time is an important commodity because we all run out of it. Our perception and the value of time are two critical elements to consider when it comes to planning our lives.

We all run out of time, so budget your time wisely. Moreover, we all have limited time and we need to budget it accordingly. How much time do we allocate to sleep, work, hobbies, relationships, education and other activities? The amount of time we allocated to certain activities will change over our lifetime. Possibly the biggest realization comes about age 40, this is when most of us develop our sense of mortality. Then we start to think more seriously about our lives and what we want to accomplish along with our quality of life now and in retirement goals.

Understandably, our mortality/death isn’t something we like to think about, and even if we do, we typically believe it isn’t near. Because of this perception of “I still have time,” often equals procrastinate. In 2020, less than 40% of Canadians had Wills because they felt they were too young to think about it.

The Relationship Between Time & Money

From a financial perspective time is money. In retirement, if you run out of money before death you are in a bit of a pickle. For the average person, time can be the biggest contributor to building wealth. Therefor, time can be more important than money from a financial perspective. Another way to consider the time/money concept is to ask yourself; Would you rather be young and broke, or old and wealthy? Most would give up wealth for time. For many, money becomes far less relevant to time as we age.

Understanding the relationship between time and money should be of high importance to all of us. With the Tycuda Group it is always front and centre because we often see the impact on people who have to find a way of making up for lost ground. The financial pieces that are important to understand about time and money are the following:

• How long before you either need to spend some or all of your savings? If you are saving to buy a car you may need all your savings at a specific point in time. If it is retirement savings, once you retire, which may be many years away, you will need smaller amounts of money from your savings regularly for years. The greater the time you have, the higher the growth rate you should experience because longer time frames typically allow for investing in longer-term growth strategies.
• What builds the greatest amount of wealth over time? Investments that have the least amount of volatility that also generate the highest returns based on the time frame you have? The shorter the time frame you have, the lower your returns should be because you should be taking less risk. Studies suggest strongly that what we should be considering is what has done consistently well over complete market cycles, (this is usually 7 to 10 years) then we don’t have to shift our investments regularly trying to adapt to changes. Changing strategies has often proven to cost investors meaningfully. Shifting strategies regularly also means you need to have very high financial literacy to get it right, or maybe you are just really lucky. If you are making these decisions, how much time have you allocated to becoming proficient and what is the learning cost of mistakes?
• The sooner you start, the less you must save. Investing early is likely the best choice you can make when it comes to maximizing the time value of money. Please review the table below showing the time value of money and the benefit of what making an additional 1% on your investments could do for you.

How To Buy Back Time

Getting good results can buy you back time. Knowing you own investments that will deliver the results you need can be as critical as the value of time. Underperforming assets rob you of time because you are forced to work longer to have the income you ultimately need or want. Learning the facts about investing is time well spent.

DISCLAIMER:

The comments and opinions expressed herein reflect the personal views of Miles Clyne. They may differ from the opinions of Leede Jones Gable Inc. and should not be considered representative of the research beliefs, opinions or recommendations of Leede Jones Gable Inc.

The information included in this document, including any opinion, is based on various sources believed to be reliable, but its accuracy and completeness is not guaranteed, and Leede Jones Gable Inc. does not assume any liability in providing it. The information provided is current as of the date appearing on the document and Leede Jones Gable Inc. does not assume any obligation to update the information or give a description of further developments relating to the securities or material discussed. The information

presented here, and any financial service being offered is directed only at persons who are residents of a Canadian province or territory where Leede Jones Gable Inc. is licensed. ? Leede Jones Gable Inc. 2021. Member CIPF and IIROC.