Time as an investment.
We all have different lifetimes; however, each living human being has the same amount of time in a given living period. Whether it is a day, month, or year, no individual has more or less than anyone else.
Time is more valuable than money.
You always have the chance to make more money, but once time is spent it can’t be replaced. So our actions and decisions about time become invaluable investments.
Time allocation.
How individuals use their time varies greatly and it is not uncommon to get off course focusing our time and energy on activities that are inferior to others. Many times we are cognizant of this, but end up doing "what we want to do" vs. "what we need to do." Deciding how to "invest" our time is a formidable task.
Investing and time.
Investing brings a whole new dimension to time and not paying attention can really be a long term problem. For most, the time spent working with portfolios, diversification, rebalancing etc are about as appealing as doing taxes. Many allocate time to review returns (especially during positive periods) but that is usually where time for investment management ends.
We understand that some people are quite capable of taking care of most financial aspects of their lives. Some adhere to a DIY technique while others consider this "time" a poor investment when compared to time spent doing other activities. Therefore, they let someone else provide these tasks because their alternate activity generates greater ROI for each incremental time investment unit.
Think about it this way. You decide to change the oil in your car and save money but it costs time. Now, consider the following:
- If you put a price on your time, how long does it take to recapture those costs?
- Do you like the idea of changing the oil?
- Will you take the time when it’s necessary or put it off until later?
- Will putting it off cost you anything in the long run?
- While you are changing the oil, do you know how to spot other problems?
- Is it safe for you to change your own oil?
- Do you trust your mechanics to inform you about recalls, or other new problems related to your vehicle?
- Have you ever used a mechanic to help with a used or new car buying decision?
Most have decided that the quick, inexpensive, oil change is a great way to save time…..or let’s say a" better investment of time" which allows us to do the things we enjoy or more productive use of time.
The same goes for our finances.
Our financial lives are a lot like our cars, they need periodic service. If they don’t get it, then it could result in a costly repair down the road. During maintenance, someone needs to check for other trouble spots. And if damage is done because of maintenance procrastination, well you can’t turn the clock back. Like a good mechanic, your Advisor should educate you about areas you probably have never thought about, look for trouble spots, and help keep you on the road and out of the ditches!
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