Last Updated 1 year by Lukas
Imagine you have an account and there is a magical force that fills your account with $86,400 every day. Anything left in the account at midnight is lost forever and immediately replaced at 00:00:01 by another $86,400. You can spend this money as you wish and there are three observations you have made:
1) Every day you start with a fresh balance of $86,400 2) If you do not spend this money, it is lost 3) You have no idea how long this magic will work and replenish your account. What would you do in this situation? Would you spend it every day to the last dollar?
This article will try to give you an alternative view on the concept of money. It will give you ideas to think about and examples of how it’s possible to perceive money. Because the human mind is very powerful and it allows us to perceive things differently, to have different feelings about what is happening outside. And this perception can either limit us or empower us.
Master account of our lives and how big is it?
If we were like most people in the world and provided with 86 400 $ that has to be spent within single day otherwise we lose them. We would spend every single dollar to end up with a balance of 0. But wait, we all have such an account, because surprisingly number 86 400 also represents number of seconds within single day. However, for whatever reason, when this number represents time and not money, we humans are much more likely to neglect it and leave some ballance unspent..
What do I mean by this? Like money, which can be spent in ways that add value and make our lives better. We can also spend money in ways that make our lives worse, and one day such an approach will catch up with us. The same can be said of time.
Either we use it wisely and get a little better every day, or we neglect it and get a little worse every day. The frightening thing is that these small changes can go unnoticed for a long time. And when we do notice them, they are usually big enough to attract our attention and much harder to fix at that point.
The luxury we have with money is that it can be saved and accumulated. It’s NOT the same with time, we can’t stop time being spent. We can only decide how to spend it. This makes time our most valuable resource. We all have a limited amount of time, but there is an almost unlimited amount of money.
What is money good for?
We can perceive money as an easily divisible representation of value. Money itself has no value, it’s just paper, metal or electronic bits. They are intermediaries and repositories of value. What we humans really want is value, houses, cars, haircuts or we can simply say assets and services.
It’s important to understand that money is really just an abstract concept (even though it has a physical representation) and its purpose is to ease and facilitate the exchange of things of value. What blood is to the human body, money is to the economy. They flow through the economy, nourishing it and keeping it alive.
What we humans are really after is value, and so we invented money to store it. Value is again an abstract concept and it’s subjective for every human being. As there are some differences between people, there are also differences in the amount of value people attach to the same things.
Time is money, right?
Wrong. This statement is probably also the reason why in English we say spend time and pay attention. In reality, time and attention are the two most precious things you have. You have a finite amount of these two resources, you can’t make more of them when you need them, and when you run out of them you die. It’s interesting that we are so careful with money, but we are generally so unwise with our time. When someone steals our money we get really angry, when someone steals our time we rarely feel the same.
We can definitely earn more money, we can save it. But in the case of time, the most we can do is try to live our lives as well as possible to extend it. Unfortunately, with the current state of technology, if we run out of time, it’s the end of our lives. We cannot save time either, because it just flows on, second by second. It’s not waiting for us.
Can changing our perception of money and time change our life?
Absolutely it can! We can see around the world that when people love money, they are able to do things to get more of it. What if we could turn that into a love of spending time in the best possible way? What if we could give people this important information today and help them to realise it?
A word of caution: Money has no value in itself, it is only a means of exchange. Its value lies in the way it is used. So hoarding large amounts of money without a clear idea of what to do with it will only waste your time and make you unhappy. And the same goes for time, if you spend it wisely it can bring a lot of happiness into your life.
Let the wise speak
Who are the people who have had the opportunity to see many years pass and who have gained a lot of experience along this sometimes bumpy road? They are our elders, people who have been there and done that. When we ask them what they would most like to do. The regular answer is to spend time with their family, friends or doing their favourite hobbies. It seems that as we get older and feel we have less time left, we get the answer to this simple question right. What is the most important resource we have? It’s time and attention.
Can we buy happiness?
That depends. Having less money than we need can seriously affect our level of happiness. Imagine being in a situation where you are struggling financially, worrying about being able to make it to the end of the month, or simply not being able to provide for the people you care about most. In general, we can say that money is able to influence our subjective level of happiness, but it’s not as simple as more money = more happiness.
Thanks to people conducting countless studies on money, we have improved our knowledge of the relationship between money and happiness. We know that there is a threshold beyond which money doesn’t increase subjective happiness. In general, this is when people have enough to pay all their bills and are able to put something aside for retirement. After that, having more money has very little effect on subjective levels of happiness.
Why are people with a lot of money not as happy as we think they are?
Most people feel most comfortable when they fit in, the so-called ‘herd mentality’. Very often it is similarities that bind people together. In the case of extremely wealthy people, there are a number of difficulties associated with this. If they want to socialise with other similar people, there are much fewer of them. Having such a huge amount of money also opens up the question of ‘how to protect it’ and ‘how to increase its value’, being separated from the common herd of people and having to solve many issues related to the huge amount of money. This can have a very negative effect on the level of happiness.
If I want to earn more money it’s just about working more hours
This statement is only partially true. Of course, if you want to earn more money, you have to be able to use your time efficiently. On the other hand, we all only have 24 hours in a day. How is it possible that some people earn so much more, but they work the same (or less) time than we do?
The answer to this question is the word ‘value’. You can’t work more than 24 hours a day. We also need to rest from time to time, take care of our families, friends or hobbies. On the other hand, we can definitely create more value. And that’s the trick. It’s about helping others and adding value. Don’t ask how to make more money. Ask how to solve more problems others may have.
What can we do about it?
OK, noted! Time and attention are our two most precious resources. But are there any proven ways to get the most out of them? The good news is that there are. And as we get wiser through the many experiences we have and by learning from others. We can continually improve our strategy for squeezing every last bit of time and attention.
The magic of compounding
Have you ever felt overwhelmed by a situation or problem? If we are like most people, the answer to this question would be a resounding yes! We have probably all been faced with a situation that at the time seemed too difficult, too frightening. Do you remember being able to get over it?
We humans have superpowers. We can learn, improve and grow. We even pass on all our useful experience to other people through texts, videos or books. This saves time, which can be used to our advantage. Because when someone else shares their hardly-acquired knowledge with you. You get the fruits of many difficult roads full of struggle in an easy to understand way. And you can build on top of that.
Is compounding over time a real help?
What if you improved by just 0.5% every day for the whole 365-day year? Do you know how much better you would be after one year? Let’s try to calculate the compounded total after 365 days if you improve by 0.5% every day. Let us say on day 0 your skills are at level 1. After one year it will be 6.17. In other words we can say you have improved by 5.17 (As we started with 1 which was your starting skill level).
We all know the world is not perfect, we need some days off. What if we improve by 0.5% for just 120 days out of a full year? In this case the final result will be 1.83. Or we can say that we have grown from 1 to 1.83. Or we could say we have improved our skills by 83%. Of course, that’s assuming we don’t get worse on the rest days. The point is, does it sound difficult to improve by 0.5% (or in other words, by 0.0005 x your current skill level) per day?
Meet the famous time-eaters
Humanity is truly amazing. We have gone from zero to hero. And somewhere along the way, we have created a lot of gadgets to make our lives easier or more convenient. As with many things, it’s not about good or evil, it’s about how we use them. For example, fire can help you prepare delicious meals, but if it gets out of control it can be very dangerous. It can be very dangerous.
Procrastination
What is procrastination? It’s a delay in doing something we want to do, but it seems too big, difficult or otherwise scary, so we just put it off as long as we can. In this case our biggest enemy is our own feelings, which are also there to protect us. How is it possible that our feelings, which protect us, can work against our best interests?
A long time ago, when we were just hunting animals and gathering plants to survive. When we started something scary, there was a certain amount of danger involved. Our feelings are really just trying to keep us away from scary (dangerous) things to keep us alive as long as possible.
What can we do about this? We can break down our goals into smaller pieces where the resistance won’t be as great to begin with. We can also make sure that we know why we want to achieve these goals. For example, there may be a task that we have never done before and that requires us to learn a lot of new information in order to be good at it. And so we procrastinate. But what if we know that mastering it will help our belowed wife? Then we may get the final push we need to get started.
Smart Phone
I think the astronauts who landed on the moon would envy us, knowing that today we have small computers called ‘smart phones’. And they are more powerful than the computers that helped them land successfully on the moon. As it was said in the Spider-Man film, ‘With great power comes great responsibility’. And that’s not all, they’re even connected to the internet 24/7, giving us access to all the information we want.
Here it is important to mention that there is a big difference between data and information. The Internet contains a lot of data (bits of information that may or may not be useful to us) and through our efforts we construct information from it. Information is a sorted unit of data that is relevant to us. This huge availability of all the data we want can easily overwhelm and paralyse us.
For example, if you want to know which car is the best for a given amount of money. You see advertisements and descriptions of cars. They all say: ‘Our product is the best! And it’s our job to extract information from that data to help us make a decision. If this process goes on for a long time, it can easily drain us of all our energy and paralyse us from making a decision.
Social Media
It all started with the good intention of connecting people with similar hobbies around the world. Today, social media is designed to exploit quirks in our physiology and keep us hooked for as long as possible. They make huge amounts of money from advertising and collecting (and selling) data about us.
As with anything else, we can’t say it’s good or bad. It’s just another invention and it’s up to us to either use it to our advantage or let social media consume us. There’s always a positive side and a negative side, and you can’t have one without the other. And the responsibility to take advantage of the upside and be careful of the downside is in our hands.
Games and streaming platforms
Today’s world goes to great lengths to tell us how bad it is to be bored. So every time we have nothing to do. Or we have a moment to reflect on our lives, to ask ourselves difficult questions and, thanks to this opportunity, to do something about it. We prefer to hit the play button on our games console or streaming service.
It’s a little alarming how much our pain threshold has dropped and how quickly we are triggered to avoid answering difficult questions by either playing games, watching TV series or simply scrolling through social media.
How do you know when you have enough money?
There is a very nice saying: ‘Failure to plan is planning to fail’. Without setting limits, there is never enough money. But we can be smart, plan a life we want to live and work backwards to calculate how much money we need. Of course, no plan is ever perfect, but we will improve and adapt over time. The most important thing is to write down the first version and improve it over time.
Once we know how much money we need for our day-to-day life, for the car, accommodation, hobbies and retirement. We will arrive at a final amount that we need to have each month, we can go as far as calculating how much we need each day to make it look smaller. That will be our stopping point and if we make anything more than that. It’s just a nice bonus, but not our goal. Remember to correct for inflation, as the value of money decreases over time as its amount in the economy increases.
Summary
We now know that money is an abstraction created by humans to express and store value. They are also capable of facilitating exchange and helping our economy to remain healthy and prosperous until they are allowed to circulate freely.
If we want to make more money. It is less about working longer hours than it is about helping others and creating more value for other people. This value is later appreciated by other people through money.
Remember that without setting limits, it’s very difficult to know how much money is enough. And our lives can turn into an endless chase for more and more money. One day we will realise this, but by then it may be too late to turn back.
We have created many ‘time eaters’, they are wonderful servants and can bring a lot of joy into our lives. On the other hand they are evil masters and if we do not set limits they can quickly regain control of our lives and make us feel sad in between. Many times overcoming initial resistance is just about dividing goal into smaller pieces, starting (Even if you don’t feel it. The feelings will support you later, when they figure out, it’s save) or knowing why you want to do something.
Compounding works wonders both ways. It can turn us into superheroes after enough time, but it can also create a lot of misery if we neglect things for a long time. It’s not natural for us to see it coming, so the only way is to increase our discipline and resilience day by day.
And please remember that the most precious resource we all have on this planet is time and attention. Because we are not yet able to get more of it. And the things we pay attention to create our memories. And our memories create our lives.