Why Wealth Is Measured In Time

How far do you think it is from Sydney to Canberra?

About 300km?

Or did you answer that question in hours like everyone else?

Wealth is exactly the same. Measuring wealth in dollars and cents is analogous to measuring distance in mileage instead of time. It doesn’t work anymore.

Stamina is no different. We think fitness is about how far we can run but really it’s measured in our ability to recover. I.e how long it takes to get our breath back and the soreness out.

The reason we are clock and calendar watchers is because time is relative. It’s about the only common denominator we have left to compare oranges with apples.

It’s also the very reason we stress about our bills. It’s not so much the amount (although important), it’s the time frame we have to pay them before we’re penalised. It creates pressure.

Therefore, pressure is ultimately a function of time.

Thats why cash flow in a business is more important than profit and loss. We want to know when money is coming in and going out. Timing is everything.

And that’s exactly why wealth is measured in time. Our biggest money fears are deadline related.

Consider this.

Imagine you visit the doctor with a headache you just can’t shake. Unexpectedly you find out you have an inoperable brain tumor which cannot be treated by chemotherapy or radiotherapy. The doctor gives you six months to live.

Now suppose you have $100,000 in the bank. Is that a lot of money? It is if you only have 6 months to live. It means you have approximately $16,000 per month to live on.

Now suppose your headache is a curable migraine. You also predict you have at least another 10 years to live with no other money coming in. All of sudden that $100,000 or $10,000 pa (less than $1,000 pm) is going to leave you way short.

Therefore, you can only have one of two outcomes. You either have more money at the end of the month or more month at the end of your money.

That’s why the real value of $100,000 is ultimately determined by the time frame, not the dollar amount.

Now add another zero. Is $1,000,000 a lot of money? It depends on the time frame.

Have a great week!

Adam

Back paddock – if it wasn’t for the last minute nothing would get done. Proof positive is today’s Moowsletter! It was worth it though, I had a fantastic Easter and I hope you did too.

Finally, thank you very much for all the feedback from last weeks Moowsletter – Happy Easter! It seemed to have really struck a chord. At the risk of gloating, if you missed it I strongly recommend the read.