“There’s a myth that time is money. In fact, time is more precious than money. It’s a nonrenewable resource. Once you’ve spent it, and if you’ve spent it badly, it’s gone forever.” ― Neil A. Fiore

There is a core principle in finance called the time-value-of-money (TVM). The principle posits money available at the present time is worth more than the same amount in the future due to its potential earning capacity. For example, $10 in 2006 is worth more than $10 in 2018 due to its ability to accumulate interest over time. At an 8% annual interest rate, if I were to invest $10 in the stock market in 2006, it would be worth $25.18 in 2018.

Now you’re probably wondering, “Wes, why are you boring me with finance?” First, sorry. Second, I bring up this important lesson because understanding the concept of TVM also creates direct application in how we steward our other resources, including time.

To draw out this application, let me break down the mental framework of how Average, Good, and Great business people think about investment decisions.

The example is as follows: If provided the option to purchase a $20k vehicle, here’s how each individual would approach their purchasing decision:

  • Average: I have $20k to buy this car. I can either spend 20k on this car or not.
  • GoodI have $20k to buy this car, but if I choose not to, I have $20k I can use to buy something else.
  • GreatI have $20k I can use to buy this car; but if I choose not to, and instead, invest $20k in an opportunity that multiplies over time, the future value of my investment could be worth $30K one year from now. Now compared to buying a $20k car right now, what could I get in exchange for $30k one year from now?

The purpose of the story is to show that when one accounts for TVM, one assesses a future opportunity cost as well as the decision at hand. So rather than simply thinking about purchasing a $20k car, the Great business person is calculating a) do I even need to make this decision? and b) is the future value worth foregoing the current investment.

This mentality is likely the same reason Warren Buffett continues to drive the same car and live in the same home he has for the past 20 years. For him, the “flashy” stuff costs more than its worth.

Time Application

Now here’s where the lesson of time-value-of-money can help out. While TVM is commonly associated with money, it can also be applied to our time. If we were to replace monetary currency with time currency, here’s how it would look:

  • Average: I have 4 hours I can spend this week binging a series on Netflix.
  • GoodI have 4 hours I can spend binging Netflix; but if I choose not to, I have 4 hours I can devote to something else. i.e. meet one new person over coffee or read a book
  • Great: I have 4 hours I can spend binging Netflix; but if I choose not to and spend 4 hours each week meeting a new person over coffee or reading a new book for the next year, this results in an extensive network and/or knowledge base.

The end outcome doesn’t have to be building a network or a knowledge base, but you get the gist. Some seemingly small tasks, when augmented over time, have dramatic repercussions in the future. One coffee meeting leads to an intro to another, to another, and so forth. One doesn’t typically get access to high-profile individuals by cold calling them directly; it’s typically through a referral, and the only way these referrals happen is through meeting people. 


For me, I’ve rid myself of a lot of television and social media. It’s not that I don’t like these things, but when I assess the cost associated with this — specifically the future value, I realize simple non-assuming pleasures in the present result in the sacrifice of a lot of future gains, things I’m truly passionate about.

What are the things you need to assess and weed out? What impact are you limiting in the future because of your habits and actions today? Cutting things out isn’t always easy, but understanding the compounding effects of time definitely makes decision making a little clearer.