Nov 2023
“Time. It’s not what you think it is. It’s a cage. And it does everything it can to break you. It’s not until you free yourself from it that you see just how small it always was.”
– Kang the Conqueror, Marvel Comics
“Time is more valuable than money. You can get more money, but you cannot get more time.”
– Jim Rohn
The time value of money is an important core finance concept. From Investopedia, the time value of money (TVM) is the concept that a sum of money is worth more now than the same sum will be at a future date due to its earnings potential in the interim. A sum of money in the hand has greater value than the same sum to be paid in the future.
Usually this future value is whatever the interest rate is since that is the “risk free return,” earnings that can be made from investing money without any risk of losing it. Because if money isn’t earning anything, it’s value is actually going down due to inflation eating away at the purchasing power of money over time.
Money is an extremely important thing in the world. We as people have constructed a society where it costs money to be alive. For better or worse, that is the reality of existence today. Every time we interact with the world, there’s a money cost. Paying rent, eating food, buying groceries, wearing clothes. Everything we do in the world has a capital footprint that it costs to do that.
This is a good thing because it’s better than the alternative. Before money, if a person needed something they had to barter to get it. Or just straight steal and take it from someone else. But with money, it created a level playing field. You didn’t have to kill someone for what they had, you could just pay them for it with this money thing. You just have to work to earn this money thing and then you can trade it in for anything you want or need. Creating a societal need where everyone has to earn money to exist.
But what that does is it turns money into a type of fuel. Human bodies are born and then we’re constantly getting older while we’re alive. So in a sense bodies are like a vehicle through time that we’re piloting. We are alive for a while and then eventually we die and we try our best while alive to not die. In a sense money is the fuel for that vehicle as we traverse through time. Because it takes money for a human to exist, we have to earn money because we expend money as the fuel source as we traverse through time. We trade time for money then we trade that money to get back more time.
I think this is why the major goal of most people who try to make lots of money, often their goal isn’t to buy lots of stuff, it’s to break their relationship with time. If you get rich, what you’ve done is broken the need to work to ensure your survival. You’re now default alive. You get to control your time the wealthier you get. And you get to ensure that you live longer and are healthier for longer. There’s a reason why the wealthier a society gets, the longer their people live. They can afford better medicine and food and shelter that keeps them healthier and alive for longer. But this happens on an individual level too.
This is why you have to become good at money. Everyone needs to become good at money in their lifetime. It’s an almost existential imperative that a person get good at managing money. Because it’s like a vehicle managing it’s own fuel reserves. If you run out of fuel, that vehicle is going to break down sooner so you have to manage how you’re Igoing to get money and how much of it you’ll have. Recognising this early is important. If you recognise that money is the fuel through time, then it helps you figure out how much fuel you think you’ll need to get where you want to go.