The time value of money is well understood, at least in theory. Money has time value, i.e. now dollars are worth more than future dollars, because you could invest your now dollars, well... now, and earn future dollars.
Most of us are pretty good at putting this into practice, whether we realise it or not. We prefer Afterpay to paying upfront. We pay our bills on the due date, rarely before. Before only if we want to alleviate the mental stress of knowing there’s a bill to pay.
The time value of money is easy to understand and easy to put in to practice. The amount of money we have now - whether a little or a lot - is finite and certain.
Valuing time is much harder. It feels infinite, although we all know it is not. It comes in past, present and future forms. Although we may be existing in the present moment, we may be living out the past, through our memories. Or living in the future, through daydreams and planning. Rarely do we live in the present, not for lack of trying, but for the fact that the present is gone by the time we notice.
Sure, we have past, present and future money, too. But past money can’t change, unlike past time (which changes all of the time through the stories we tell ourselves). And future money often depends on past and present. We can reasonably expect that if we are employed we will continue to be, and that annual bonuses and pay rises will come around eventually.
By contrast, our future time is uncertain. Although it’s unlikely, it is possible to live an unhealthy lifestyle and live for a very long time. All of this uncertainty makes decisions about how to allocate time extraordinarily difficult. It’s no wonder we do such a bad job at it:
"You’ll find no one willing to distribute his money, but to how many people each of us shares out his life!…Men are thrifty in guarding their private property, but as soon as it comes to wasting time, they are extravagant with the one commodity for which it’s respectable to be greedy." - Seneca.
The challenge with valuing time is that it continues regardless of how it is spent. So, we have two choices: to live or to spend time. Equally, this is a cause for hope. Time is dependable and reliable. We can count on it for when we choose to live the lives we want.
When that moment comes, remember the time value of time:
- The past is certain, but always changing through the stories we tell ourselves. It is worth as much as we can learn from it.
- The present is our only experience, but it’s gone before we can grasp it. It is worth our full focus, our full attention.
- The future is uncertain and relies on too many assumptions. Anticipate it, but leave expectations behind.
"The greatest waste of life lies in postponement: it robs us of each day in turn, and snatches away the present by promising the future. The greatest impediment to living is expectancy, which relies on tomorrow and wastes today… All that’s to come lies in uncertainty: live right now." - Seneca.