Exchanging Time for Money

This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35.  Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.

I recently sold my practice and have started collecting an hourly wage instead of the net profit from my practice. The income is roughly the same, but I’m now reminded of the fundamental exchange of time for money. In the past, if I came in late or if I missed a day of work, the profits would be unaffected (assuming all the work got done). But now, if I arrive half an hour late, I’m expected to update my time sheet and I receive less money in exchange for contributing less of my time. On the other hand, if there’s more work and I stay an hour late, I’m paid more for putting in extra time.

Time and money are both scarce resources. Although no one knows how much time they have left, none of us will live forever. And, despite the fact that money creation is theoretically unlimited, in practice each person can only accumulate a certain amount of money. When we work, we exchange time (and effort and creativity) for money at the defined rate of our salary or wage. Everyone’s rate is different, but each of us goes to work to earn money. Money, of course, is a means and not an end in itself. It can be used to provide the necessities of life or luxuries or experiences. But money itself serves no other purpose.

When we retire, we reverse the equation and exchange money for time. I spoke with a couple yesterday who prepared very well for their retirement. When we meet with them, we ask them if the income they’re receiving is adequate and if we should be sending them more. They always decline, saying that they’re doing all the things they want to right now and more income wouldn’t make a difference. They enjoy traveling and have toured Egypt and Europe and even took a cruise to Antarctica. The money allows them to spend their time doing things that they enjoy. In this way, time, like money, is a means and not an end in itself. It can be used for work or play or to build relationships, but has no inherent meaning otherwise.

People with the goal of retiring early seem to value time more than money. We will use money to pay for a vacation or a sabbatical (mini-retirement) or to exit the “rat race” early. Exchanging money for time allows us to do the things that make our lives meaningful. Whereas the people who find fulfillment in their job, like my father, seem to have little desire to take time off and are in no rush to retire. Whether we value time or money depends in part on what we do with them.

What will you do with your time, once you can retire and can use it in whatever way you choose?

7 thoughts on “Exchanging Time for Money”

  1. The statement is correct! Those who want to retire early, allways value more time over more money. If you have secure investments, then you can allways get more money but time, is the one commodity that is unknowable, and can never be replaced and must forever and allways be spent. You cannot SAVE time, only spend it. Retiring at 45, I’v had many decades to, the wife and cercumstances permitting, spend my time doing what I wanted. I have enjoyed these years immensly and would not trade them for anything.

  2. Wonderful post. I have three young children and am working, currently away from the family in Calgary while they remain in Montreal to finish out the school year.

    You really become aware of the time you spend doing things for money when your life is disrupted like that. Can’t see the wife at the end of the day, can’t play with the kids. Those little things are what creates happiness and meaning.

    We all think we’ll live to see another day, but that’s only because we are seduced into that pattern from our experience. You are right, one of these days will be the last on this earth. Time is the most scarce resource we have.

    Again, nice post.

  3. Follow your heart Robert,I retired from my work at 49,went to China to teach english,I love it,if you have a degree you don’t need to go back to school to become a teacher,get a job teaching adults it’s very rewarding and relaxing. I read something in a book I bought at a garage sale for a dime. Only fools buy things they don’t need,with money they don’t have,to impress people who don’t care. Good Luck.

  4. Greg, that’s awesome advice. I’m fortunate that I’ve never been tempted much to buy things I don’t need with money I don’t have to impress people I don’t care about. And I think that makes a huge difference when trying to live within my means.

    That’s really cool that you find it rewarding to teach adults in China. I think this world would be a better place if most people were able to do work that they find rewarding, and do it because they want to, not just for the paycheque.

  5. Robert, this is the post to which you hinted at last week in a reply to my comment, right?

    As I watch a traffic report on TV for everyone still in the “rat race,” I get ready to eat breakfast and later do some of my volunteer work at an area school with my free time (and the traffic will be very light, of course!). [Even with gas prices at bearly $4 a gallon, it is only about 7 miles away.]

    Later tonight I will go dancing, something I could not do on a Tuesday night (even when I was working part-time) because I worked that day and was too tired to go out that night.

  6. deegee, I look forward to being able to make those same choices about what to do with my time as you are making now. I try to do some of the things, already, that will make my life meaningful, but there are still many things that I can’t get to. Life is full of choices, and when someone has full choice over how they spend their time, I bet it becomes more important than ever to choose wisely and do the things that are most meaningful. I hope I’ll be equal to the challenge.

  7. This is an eye opener for most of us who value money more over time. As money can be saved by various means time cannot be. Money can be saved to enjoy life and do the things which we are always fond of doing. Feeling content in life is the best thing to happen to anyone. Buying things to show off doesn’t really make anyone satisfied. Thanks for such a wonderful blog!

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