Wise Money: Control Over Your Time
Quote to Ponder
“Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.”
- Morgan Housel
Recommended Links
- The Best Thing We Watch This Month
- Large Growth Stocks are Overvalued, Small Value Stocks are Undervalued - Morningstar
- Professor Kenneth French on Risk and Return - Rational Reminder Podcast
- Social Media and Overprotective Parents Changed Childhood
- Financial Pros and Cons of Retiring in Minnesota - Star Tribune
- Cognitive Dissonance - Cliff Asness (AQR)
Insight
What's the difference between a rich person and a wealthy person? A rich person has converted their money into possessions, while a wealthy person has converted their money into time.
Once someone has achieved a baseline measure of financial success, the goal often becomes a pursuit of freedom. The freedom to control one's schedule and spend time with whoever and wherever one pleases is the ultimate goal.
Why do you think the ultra-rich often purchase private jets? It's not just because it's more convenient than a commercial flight; a private jet unlocks the ability to be almost anywhere at a moment's notice. Want to be in Miami for the night to see Lionel Messi make his MLS debut? Just hop on the jet as if you are going out to dinner.
A study published in the Journal of Happiness Studies, "Psychological Wealth and Subjective Well-Being," found that autonomy and control over one's life were significant predictors of subjective well-being across 15 different cultural groups.
Not having control of your time is a drag on happiness.
They say money doesn't buy happiness. But money can buy time. And time can equal happiness. That's the ultimate financial goal, isn't it? Financial independence. You've accumulated enough assets to produce enough income to provide for your lifestyle. You no longer have to report to work! You can control your time.
When developing financial plans, clients often face decisions regarding their conflicting financial objectives. These choices typically revolve around goals related to either acquiring possessions or controlling time. For instance, they may need to decide between purchasing a luxury car or retiring a year earlier.
Money is just a tool. That tool can be used to collect possessions that will ultimately lose their luster. However, if you use the tool to gain control of your time, there is a better chance of a lasting increase in happiness.