Do We Have Enough Time?
As adolescents, we found that we had an abundance of time. We could socialize with friends in a cafe for hours, go to class, take a nap, and read without our days feeling compressed. As we aged, our days began to revolve around efficiency and the pursuit of how much we could squeeze into twenty-four hours. Time became important because we always have something else to do and somewhere else to be. This constant focus on efficiency has led us all at some point to say that "there's just never enough hours in the day." This state exists for years and then devolves into complaints that our lives aren't long enough to accomplish everything we want to. But is that true? Or is our time perception warped? It turns out this is not a modern question; mobile email and consultants did not warp our sense of time, even if they did make it more efficiently warped.
Thousands of years ago, Paulinus relayed to his friend, Seneca, how mean nature is for giving us such a brief life and allowing us to perish just as we are getting ready to live. If we change the names to Paul and Sam, this could just as well be a complaint today, given how most of us devote the prime years of our lives to working for someone else, saving for retirement, and hoping that through good fortune, we will be able to one day retire and devote our days to living for us. Few question this life course. We need health insurance, a steady income, and a 401(k) we can use to invest in the stock market tax-efficiently. Everyone with even de minimis investable assets has been pitched by a financial advisor whose favorite quip is that the S&P 500 has returned an average of 11% annually for the last eighty years. And don't you know some genius named Einstein once said that compounding is the most powerful force in the universe? How can anyone argue with genius? So most don't. They stick to the familiar path by working and saving and hoping for good markets.
In his response to Paulinus, Seneca makes it clear he would question today's common path just as he did with the common path of his time. In his assessment, Seneca observes, "People are delighted to accept pensions and gratuities, for which they hire out their labor... but nobody works out the value of time: men use it lavishly as if it costs nothing." Despite the wisdom of Seneca's observation, the common path hasn't evolved in any meaningful way in millennia.
Many of us may have valued our time on a monetary basis, usually to make a relatively minor decision, such as whether it's worth it to pay a landscaper to mow our grass. We apply basic logic and decide that if I make $50 per hour and it would take me two hours to mow my lawn, then paying a landscaper less than $100 to do the work creates more economic value and is, therefore, the logical choice. In the most simplistic example, if the landscaper will mow my lawn for $75, then I can spend the two hours I would have spent cutting my lawn working. At the end of the two hours, my yard will be mowed, and by using the landscaper, I'll have an extra $25 - the additional economic value. Applying the economic value added analysis is a helpful framework, especially for more minor decisions where the economics of a decision are the paramount consideration. But the economic value added analysis is less useful for big decisions, especially long-term decisions, because in these decisions, economics is generally only one of many considerations and becomes increasingly harder to predict over an extended term. For example, a potential spouse may be attractive due to a high salary, but it wouldn't be logical to marry someone on this basis alone. Marriage is far more complex than economics, and one must consider the possibility of a mid-life trip to art school.
Choosing to embark on the common path and the career, money mindset, and debt (student loans, mortgage) that path usually entails is an enormous decision. It should include an analysis of much more than economics because, just like marriage, economics is only part of the equation. And while it's true that this decision is so complex that it will involve considerations that can't be reduced to measurement, it certainly involves a significant consideration that can be measured, but almost no one accounts for - time.
The fallacy of the common path is that it values time in the future the same as time today. And the paradox is that we've long known money in the future isn't worth as much as money today; yet, no one applies this logic to time. Statistical evidence is abundant that rates of almost every human ailment increase with age. Cancer, heart disease, lung disease, and even joint replacement rates all rise the older we get. And we've all spent time around older people and heard their complaints of all the other downsides of old age that aren't captured in statistics, such as creaky joints, a slowing metabolism, and decreased energy levels. The unmistakable takeaway is that old bodies are less capable and less functional than younger bodies. Hence, the scientific and anecdotal evidence is clear - time today is worth more than time tomorrow. Not only do we not have to wait for the present moment to arrive as we do with time in the future, but our bodies are also healthier, our minds are sharper, and statistically, we are more likely to be alive today than we are at any point in the future. Still, we follow a path that emphasizes the freedom of our later years, attained by paying with our younger, healthier years. This is the cost of the common path Seneca rejects. As he wrote to Paulinus, "putting things off is the biggest waste of life: it snatches away each day as it comes, and denies us the present by promising the future."
The trouble with promises is that they don't always come true. Even if our bodies and minds were as vigorous and capable in old age as they are in our younger adult years, freedom in old age would still be worth less than freedom today because one would have to account for the delayed gratification. However, acknowledging that for the majority of humans, the later years of life come with uncertain mental and physical fitness, not to mention the uncertainty that those later years will occur (we could all perish before our life expectancy), it is clear that we overvalue time in our old age and undervalue time in young adulthood.
But how can we measure the value of time? Despite the confident rhetoric that money in the future can be accurately valued, any measurement of future monetary value is best thought of as an educated guess. We can use historical data sets to develop the most educated guess possible, but our measurement is still a guess because the future has more uncertainty than we have measurable variables. Accepting this, measuring the value of time isn't all that different from measuring the value of money.
Modern finance measures the present value of a dollar in the future using the following formula:
Present Value = FV / (1+r)^n
Where:
· FV = Future Value
· r = rate of return
· n = number of periods
*Source: https://www.investopedia.com/terms/p/presentvalue.asp
As you can see, the critical variable here is the assumed interest rate. Everyone knows the interest rate will not be constant over the period measured, but again, we accept the result as an approximation. The same formula can be used to measure the present value of time in the future with a few modifications. First, the interest rate will be our rate of decay (rather than effectively money's rate of decay). This will likely be different for everyone, which makes sense given that we all have different health conditions and family histories. If no one in my family has made it past age seventy, I will have a higher rate of decay than someone whose family has all lived into their hundreds. Also, humans tend to decay faster in old age than in middle age, so the older you are, the higher your rate of decay is likely to be.
Next, the future value should always be one hundred. This isn't intuitive because if you're older, you may think that you don't feel nearly as sharp and capable as you used to. But even if you're fifty, in so-so health, and feeling half as good as you used to, a future value of one hundred is appropriate because you're measuring time in the future against time today, not time in the past because that time is spent.
Once we appropriately modify these variables, we can run the formula. For example, let's consider a twenty-five-year-old named Sam and say he wants to know the current value of his time at his estimated retirement age of sixty-five, or forty years from now. Sam has an average family history and no underlying medical conditions, so we will assume a three percent annual rate of decay, knowing that Sam's actual rate of decay is likely lower for his immediate future but higher as he approaches sixty-five. With a future value of one hundred and a rate of decay of three percent per year, we find that his time in his sixty-fifth year is only worth about thirty-one percent of his time today. Playing with the numbers, a five percent rate of decay makes Sam's time in his sixty-fifth year worth only about fourteen percent as much as his time today.
Even a very rough approximation of the present value of our time in the future demonstrates that we have no concept of the value of our present time. We go to work thinking we are earning money, but it would be more accurate to say we go to work to trade our time for money. And because we don't measure the value of our time, we undervalue it. Ideally, we'd have both time and money in abundance, but for most, this is not the case because, for most, acquiring money involves sacrificing time. Most are born with a lot of one and none of the other and many will die with a lot of one and none of the other. The lives we live don't balance money and time because we only measure money.
Believe it or not, most of us are born billionaires. In the developed world today, the average newborn is expected to live between 2.2 and 2.3 billion seconds. Some of us get a much shorter time, and many will get a longer time, but no one will get infinite time. And we all intuitively know this. But we don't act like it. Yet, that doesn't mean we can't act like it. By approximating the value of our time, we see that slowing the rate of our decay is hugely impactful in determining how much our time in the future will be worth. A healthy diet and regular exercise could be the difference between Sam decaying at a rate of three percent annually rather than five percent annually. These well-being investments may only return two percent this year, but in forty years, they will more than double the value of Sam's time. It turns out that Einstein's theory on compounding applies to more than money.
As crucial as slowing the rate of our decay is, the fact is that any change to our rate of decay, even if it doubles the value of our time in the future, is marginal in the big picture because we are still decaying. Even with significant investments in well-being, our time will still be worth much less in the future than it is today. Suppose Sam embarks on a strictly regimented diet and exercise program, regularly goes to the doctor, and takes all the latest supplements in the most optimistic and realistic scenario. In that case, he may be able to slow his rate of decay to one percent. Using these numbers and our formula to approximate the present value of time in the future, Sam's time in his sixty-fifth year will be worth about sixty-seven percent of his time now. Sam's health investments pay off in this scenario, but his time loses a third of its value even for all his effort. So even in the most optimistic case, Sam could toil away in a job, at the gym, and in the doctor's office for the next forty years and hope to spend his free years operating at two-thirds of his present capacity.
Sam's hypothetical path is the path society idolizes. Society praises those who work, save, try to stay healthy, and then retire to enjoy the money they've traded their time for. This is the aspirational timeline achieved by the ones we call fortunate. But even for the fortunate ones, those "free" years are closer to life's earliest years where we struggle to walk and avoid shitting ourselves than to young adulthood's mental clarity and physical capability. This is usually not the reality most imagine for the effort to work, save, and endure. Still, the fact is, probabilistically, this is likely the reality we’re headed for. This reality is what makes the common path a losing trade and we would know that if we only valued our time.
To solve our time problem, we must value our time and then act accordingly. To act accordingly is to exit the common path that prescribes what to do and where to go at each age and stage of our lives. To act accordingly is to make incremental improvements in our diet and exercise routines and tectonic improvements in how we spend our time. To act accordingly is to start now and live in the present moment, every moment, and avoid society's wretched swell toward employment and efficiency. To act accordingly is to heed Seneca's wisdom and not just know but understand that "the state of all who are preoccupied is wretched, but the most wretched are those who are toiling not even at their own preoccupations, but must regulate their sleep by another's, and their walk by another's pace, and obey orders." To follow the common path is to lead a preoccupied life.
Our problem is not that we don't have enough time. Our problem is how we spend our time. And we spend our time poorly because we don't understand what it's worth. All of us, young and old, have the present moment and, with it, the opportunity to cherish the present and alter our paths to create a time-centric future. Once we understand the value of our time, we can appreciate how short life is. And, thanks to Seneca, we can measure this too; "if people want to know how short their lives are, let them reflect on how small a portion is their own."