Time is Money
Plant in your minds the importance of time as it relates to money. Because, if not yet obvious to the youngest two generations, money will become integral to most of your major decisions in life.
You’ve heard the term Time is Money. Well, in a very real sense, it is. The most valuable thing you have in life is your precious time – and it’s finite. It’s up to you how valuable it becomes. The young fellow that co-founded and currently leads Facebook, Mark Zuckerberg, certainly added value to his time early in life. You see examples of friends and neighbors enhancing its utility every day. Time is not meant to be wasted but so often we do just that. Because wasting time comes naturally.
First, let’s create a proper environment - at least initially - an achievable world in which to develop the simple plan we intend to pursue. Let me be more specific. My objective for you – the Millennials, Gen-Zers, and that budding Alpha Generation – is to plant in your minds the importance of time as it relates to money. Because, if not yet obvious to the youngest two generations, money will become integral to most of your major decisions in life. This involves two other vital concepts already mentioned in previous blogs: It’s Never too Late, but Early Is Best and The Amazing Power of Compounding. Like the PDQ Principles of Investing, these concepts feed on one another.
Never Stop Earning
My ultimate objective for this blog is to create situations where even while wasting time, our adopted plan is adding value despite our wasteful propensities. A successful Millennial recently told me that before she became the master of her own destiny (FIRE), she worked 50-60-70 hours a week for pay – often good pay – but earned little more. She still works a lot, doing what she enjoys, but now earns money while she works AND while she sleeps or pursues other interests. This is the world many of us hope to achieve – where we, too, become masters of our own destiny. It necessarily involves the productive use of time and money. It can include adolescent years (it did in my case thanks to my parents), teenage years, young adulthood, and later, those middle years when folks finally begin to consider the possibility of “an end in sight”.
Simplicity and the PDQ Principles
My plan is simple, but as mentioned earlier, simple things are often very difficult to achieve. In its simplest form, and as early in life as possible, we begin to swap our precious time (labor, brain power, etc.) for money. The point is to save as much as circumstances permit, invest those savings in a disciplined, diversified manner, and then patiently go about our business as our future becomes increasingly secure.
So, let’s continue this journey down a more enlightened path, which means it’s time to elaborate on my PDQ Principles of investing: Patience, Diversification and Quality implemented under the guiding light of a simple financial plan – one that begins TODAY (It’s never too late, but early is best) and that optimizes the amazing power of compounding. Remember, a single dollar invested today at 10%, compounded quarterly, for 45 years will produce $85 at retirement; whereas, the same dollar invested 20 years later at 10%, compounded quarterly, for 25 years will produce only $12 at retirement. This illustrates the startling difference between beginning to save at age 20 versus two decades later. And for all kinds of reasons, that’s what far too many people do… wait until their 40s to start seriously investing for their future retirement.
We’ll begin next week with the “P” portion of the PDQ Principles – that is, if you can muster the “patience” to wait until next week. If not, you can sneak a peak at You, Me & the Tree where I introduced the principles back in 2018.