The Financial Independent

Dear reader, I’m a fatty^[1].

You know, sometimes I can’t help but notice that people don’t value their time properly. It’s like they’re allergic to free time or something! Picture this: you’re on your journey to financial independence, and you come across a troubling situation. Your cable bill has skyrocketed by a whopping two whole dollars per MONTH. The horror! Do these people have no shame? You’re ready to furiously pick up the phone and argue your way back to a lower bill. But hold on a second, is it really worth it? Seriously, think about it.

what is my time worth?

Now, let me be clear, your time is valuable. For every human being living, breathing, and wandering about on this good earth, their time has a non-zero worth. How can I be so sure? Well, I used to scavenge the streets as a kid; I’d go around collecting things I would find— Loose change, bottles, cans, of course, but also: wire, scrap metal, even those Marlboro cigarette packs that gave out “miles”^[2]. With that in mind, it’s extraordinarily difficult for anyone’s time to be truly worthless.

Here’s how I like to approach it: think about how many hours, days, or even years of your life you can save by making a certain choice. When faced with financial dilemmas, you can categorize each decision as either:

1. Money Now / Time Later
2. Time Now / Money Later

…

There are also obviously choices which are pure wins (save time now and in the future) and pure losses (using time now and in the future)— I would hope you’re smart enough to take the W when appropriate.

It’s all about finding a balance. We’ve got the “Profit Taking” approach, where you’re exchanging your hard-earned money to buy some of your life back. Then, there’s the “Investing” approach, where you’re sacrificing your time now for a return in the future. The funny thing is, most people lean towards profit taking while neglecting investments, and FIREers are heavily biased towards investing. And you know what? I think they’re both wrong, or at the very least, a little biased.

Now, let’s go back to that cable bill scenario. Imagine having to call every two months to get that $2 charge removed, enduring an hour-long phone call every dang time. Sure, you’re saving $12 per year, not bad, especially if you’re making minimum wage. But, what if you were saving $200,000 per year? Hot damn! That measly $12/year would translate into approximately $2,000 over a 10-year span, allowing you to retire a few days earlier. But wait a minute! You’d also have to spend 60 waking hours on hold, navigating phone trees, mashing numbers on the dial pad… yuck! To me, the answer is clear— I’m happy to pay a little extra to avoid that headache.

Let me share a personal example. I live pretty close to my office, about a 5-mile commute. Now what self-respecting frugal person, such as myself, would drive, let alone occasionally take the toll road? This guy (two thumbs proudly pointed at the author)

Stay your pitchforks, everyone. Hear me out.

• The one-way tolled route takes 9 minutes.
• The toll road has a free side road, and that route takes 12 minutes.
• The fastest (which is far from the nicest) cycling route is 32 minutes.

The goal of financial independence is to have more free time to do the things we love, right? I know for some they, may relish their daily commute, but for me, the only goal is getting where I need to be as fast as possible. So, when faced with the opportunity to save a 40-45 minutes every workday, you bet I’m taking that in a heartbeat! That’s more than a week of extra time every year. It’s like finding a secret stash of time hidden under your mattress.

But wait, I’m in theory a mathematician by trade; let’s crunch some numbers.

Financial independence is all about saving aggressively and making your money work for you. So far so good, and driving every day isn’t exactly free. In my case, the additional gas and maintenance costs me around $400 per year: no small sum, to be sure. With some clever investing and adjusting for inflation, that $400 per year could have grown to about $150,000 over a 20 year career.

(As an aside: as an American with a typical city layout, it’s unfortunately impractical to live without a car, and so I did not include the fixed costs of vehicle ownership in that number. Congratulations to the Dutch, Bay Area folks, NYC dwellers, etc. etc. who can easily get by without a car. You’re living the dream).

So, here’s the deal: by driving to work, I’m saving a colossal 150 days of my life. Like hitting the fast-forward button and skipping through the bullshit. The question then turns to: how much does saving an additional $150,000 shorten the length of time until retirement? Turns out, for me, not much. In fact, it’s in the range of about 120-150 days. So, yes, I might have to work an extra 6 months, but here’s the kicker— I get to enjoy that same amount of time now, while I’m still (relatively) young.

Oh, and remember, I mentioned that free side road next to the toll road? Well, taking it would cost me about $150 per year if I used it every workday. Running that through the same analysis as above, you’re saving about 10 days in exchange for having to work an extra 50 days more. The trade-off is clear to me. I’m optimizing for maximum free time in my life, which is why I’ll drive to work but won’t take the toll road unless I’m facing an incredibly pressing problem. FOMO on priority lanes? Not today!

So, my friend, the moral of the story is to value your time and understand it’s worth. Whether you’re new to FIRE and leaning towards profit taking, or you’ve been in the trenches for a while and have overcorrected, take a step back and think about not just where you’re investing your money but also your precious time.

Now, if you’ll excuse me, I’m off to find more hidden pockets of time and enjoy the sweet freedom of my choices. If you have any questions or want to share your thoughts, feel free to reach out to TheFinancialIndependent@gmail.com. Cheers!

PS: I love the concept of the movie In Time^[3]; the execution, not so much.