Issue No. 50

The adage used to be "time is gold." Now, it has evolved to "time is money." Gold might have lost its luster, but money has consistently held our interest. When our expertise is sought, we rarely offer it without charge. The underlying reason? It consumes our time. It's disheartening when our time is squandered. It almost feels disrespectful when asked to provide services for free. Picture someone saying, "Hey, I've heard you're skilled at drawing. Could you draw me for free?” For free? How ridiculous. Knowing that a drawing requires at least four hours, you think, "Why would I devote four hours to this without any compensation?"

This scenario is wonderful because we often don't hold ourselves to the same standard. We willingly, knowingly, and even eagerly waste our own time, as if there's a difference between wasting it ourselves and others wasting it for us. In fact, I'd argue that spending your time on others is far more valuable than idling away on futile activities alone because the former cultivates your character, while the latter merely squanders your time. We seldom, if ever, compensate ourselves for this shortfall, notably as accountability has seemingly vanished from our vocabulary.

So, how do we embody this "time is money" principle in practice? The approach is straightforward. Assign a specific monetary value to each hour of your day, excluding work hours at your primary job and time for sleep and chores, as these are essentials for survival and thus excluded from our calculations.

When employed by a company, someone aged between 25-35 might be valued at roughly $25 per hour which is the US average. Apply the same valuation to other activities in your life. Spending three hours with friends equates to a potential earning of $75. Five hours spent gaming could have garnered $125. If these hours don't yield equivalent financial returns or are not recovered through passive income, they detract from what I term 'time value’.

Let's make it more tangible.

You have exactly 168 hours a week. After deducting time for sleep (56 hours), chores (35 hours, based on calculations that include dishwashing, eating, showering, cleaning, laundry, etc.), and your main job (40 hours), you're left with 37 hours of potential self-improvement time. These hours could elevate your current status. Valued at $25 per hour, these 37 hours represent an additional $925 weekly or $3,700 monthly that could be earned by dedicating this "free time" to productive endeavors.

You might ask, "So, should I just always work and worry about making money? Isn't working 40 hours a week already enough?" No, that's not my point. First of all, is it truly enough? If so, then you needn't worry. Spend your 37 hours of free time each week however you wish. My point is, you could be significantly enhancing your life if you dedicated some of those 37 hours to making more money or being more productive now, so that you can earn more later. In my case, I allocate 30 of those 37 hours each week to my other businesses and to upskilling myself. I learn about marketing, sales, programming, design, and storytelling (this newsletter is part of that). This means I am effectively earning an additional $750 per week in time value. The remaining 7 hours, which could have a time value of $175, seem negligible compared to the $750, thus justifying their use for leisure. Subtracting the $175 considered wasted from the $750 earned gives me a net gain of $575 in time value per week, in addition to my salary from my day job. That amounts to an extra $2,300 per month on top of my monthly salary. These earnings aren't in liquid cash now but are accounted for as time value—a measure of their potential conversion into cash later, when I'm ready to offer a product or service for sale.

The simplest analogy is this: imagine you're growing dwarf apples in your garden. The effort you invest in tending to that garden directly correlates with the number of viable apples it will produce. If you dedicate no time to it, you'll harvest zero apples after three years. However, investing a certain number of hours will yield a proportional amount of apples, which you can then sell for cash in the market. During those three years of consistent effort, you might not have cash in hand, but you possess potential value, akin to the concept of time value I discussed earlier. And yet, the prospect of a future reward justifies spending three years cultivating that garden. This principle applies equally to personal development: commit to spending three years consistently working on improving yourself, and you'll find your value significantly increased by the end of that period.

When you begin to perceive and utilize time as leverage rather than as a mere commodity, you fundamentally alter its value. A commodity is purchased based on its price, similar to how your employer might pay you $25 per hour for your time. In this scenario, you're essentially a commodity. Yet, consider that your boss might be earning $250 per hour, reflective of the average CEO salary in the U.S. The disparity becomes even more stark when you look at the earnings of the highest-paid CEOs: Stephen Schwarzman of Blackstone Inc. earns about $121,693 per hour, Tim Cook of Apple earns $47,798 per hour, Sundar Pichai of Alphabet Inc. (Google's parent company) earns $107,204 per hour, and Mark Zuckerberg of Meta earns $13,033 per hour. This highlights how significantly the value of an hour can vary, illustrating that when you use time as leverage rather than as a commodity, its worth can exponentially increase.

Your time is inherently capped at 2,080 work hours per year, assuming a standard 40-hour work week. This cap means there's a limit to how much you can earn if your income is solely dependent on hours worked. Entrepreneurship, however, breaks down this barrier by removing the direct equation of hours worked to value created. In entrepreneurship, your value is no longer tied to the time you spend working but to the value you provide through your expertise.

This shift underscores the importance of investing time in developing your expertise within your niche or field. Your potential value—and consequently, your ability to increase your financial and lifestyle freedom—is directly tied to how much you're willing to invest in your own growth and development. Wasting time, therefore, equates to squandering opportunities to enhance your value, underscoring the critical relationship between time, value creation, and personal development.

Don't get me wrong. I'm still an employee and likely will be for many years. However, I dedicate 30 hours each week to my self-development to increase my expertise. It's an investment in my future. What's best is that I enjoy what I do. In fact, I find more satisfaction working on my own projects than in my primary job because I know these efforts will eventually yield significant value. I’m just lucky that the skills I learn from my job are the same skills I have to use in my personal projects. This concept is similar to studying at a university. You spend four years earning a degree to position your expertise at a certain level, ensuring you're paid within a specific range. That's essentially what education is today. Yet, it's astonishing how many high school students earn more in a month on YouTube than someone with a Master's Degree does in a year. How is that possible? Again, they leverage time.

The lesson here is straightforward. Time indeed translates to money when you work with the intention of earning it. Whenever you waste time, consider the potential earnings you're missing out on. This isn't to say you should always be working. You should have hobbies, travel, meet friends, and enjoy life. However, to value your time and live a financially free lifestyle, you need to attach a price tag to your hours. This way, the time spent on leisure is justified because you've already put in work elsewhere. My personal mantra is this: an hour of recklessly spent time can be offset by four hours of focused self-development. I follow this principle so that when I do have fun, I can do so with peace of mind, knowing I've earned it. The problem with our generation is that we don't earn our rewards anymore. When I was younger, my grandmother would usually tell me to clean the house first before I could watch the TV. If I want to ask for money, I would be given first a task to take her white hair (1 peso for each white hair pulled from her unforgiving scalp). Now, our entertainment is prioritized over work. The reward comes before the effort. Two hours of doomscrolling on social media often precede any work. Continue this for years, and you'll inflict permanent damage on your brain and your dopamine system, which drives your motivation. There's no wonder why so many of us are confused, stressed, and depressed—we don't have meaningful goals anymore.

Now, the choice of how you spend the next hour is yours.

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Until next week,