The time value of time
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 - but that’s an emotional, rather than a rational decision. Adam Smith is sure to pay his bills on the due date.
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.
According to the time value of money, when we consider possible future dollars, we have to discount them back at a rate of return we are happy with, to make them equivalent to our now dollars. What would it take for your present time to feel equal to your future time?
It would probably take a lot. It’s hard to compare the value of one minute now to the seemingly endless future years. We have a tendency to overstate the value of future time, and understate the value of past and present time.
We want to believe that we live in the present, and take advantage of the moment. And never waste time. And that we learn from our mistakes.
But how easily do we give up our present time to save a few dollars? Give up our time to useless information via the news or the social medias? Say yes to that thing that you know you shouldn’t?
The great paradox of modern life is that no one wants to waste the time we consistently waste. We are all busy, we’re all guilty of telling our friends and family that we don’t have time for them. But if we look at how we are actually spending our time, does it measure up to what we actually want out of life?
The sad part about 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 only as much to us 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. Therefore, it’s impossible to value. 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.