When you daydream about being rich, what do you imagine? Many people focus on the material possessions and flashy lifestyle they could afford — luxury cars, yachts, mansions, first-class travel…
Don’t get me wrong, those things are all a wonderful benefit for those who can afford them.
But the true value of wealth is often overlooked.
You’ve probably heard the saying ‘money can’t buy happiness’.
What about ‘money can’t buy time’? I believe time and happiness are linked.
But there are only 24 hours in a day, right?
It’s true. Whether you’re rich or poor, everyone has the same amount of time in a day.
But there is a difference between how rich and poor are able to spend that time.
Through wealth, you can have more freedom to choose how you spend your time.
And that is the true value of wealth.
Trading time for money
For the majority of people, it’s normal to trade time for money by working a job.
You work a certain number of hours, and you get paid for those hours. And for low-wage earners, they might have to work a lot more hours than others just to make ends meet.
The wealthier you get, the fewer hours you must work and the more hours you can choose to use how you see fit.
The sweet spot is when you can afford income-generating assets — interest, dividends, investment returns…passive income which streams in around the clock without having to lift a finger.
As you can imagine, when you can live on that kind of income, it frees up a lot of time.
But, of course, many already-wealthy people do continue to work, despite not necessarily needing to. If they find their job fulfilling and meaningful, that may be how they want to spend their time.
But the big difference is that they have the choice to work, it’s not a necessity to survive. [openx slug=inpost]
Benefits of more free time
Going back to ‘money can’t buy happiness’, well, it can buy back some of your time, and that CAN lead to more happiness.
A 2017 study published in the Proceedings of the National Academy of Sciences showed that money spent on time-saving services produced more happiness than money spent on material purchases.
And when you take labouring for money out of the equation, suddenly you have a lot more free time on your hands.
There are numerous benefits to more free time.
It allows you to do the things you value in life. That might mean spending more time with family, travelling to new destinations, pursuing hobbies and interests…
Being able to spend your time however you like without the pressures of employment…that might sound even more luxurious than a flash car or sprawling mansion!
How you can buy back your time
Now the good news is that this sort of luxury lifestyle – where you can afford to ‘buy back’ your time – is more easily attainable than you think.
You don’t need a $5 million portfolio.
Heck, $5 by itself can go a long way.
Here are just a few quick examples of ways you can achieve more free time in your day:
- Save time at the supermarket by having your groceries delivered.
- Hire a housekeeper to do the cleaning for you.
- Use a laundry service to wash, dry and fold your laundry for you.
- Hate shopping? Hire a personal shopper.
- Pay someone to mow your lawns and do your gardening.
- Pay someone to wash your car.
Spending money to outsource chores and errands can greatly free up your time so that you can spend it more meaningfully.
Of course, the catch is that the more disposable income you have, the more obtainable these services are.
An even BIGGER benefit…
As you begin to build up wealth, increase your income (whether through your job or your investments), and start trading dollars for time, you’ll quickly see that there’s another important benefit to all this…
You live longer…
That’s right, according to the Brookings Institution, trading dollars for time now can also lead to a longer life expectancy.
But it makes sense, doesn’t it?
If you can afford to buy time, you can use that time to hit the gym, go for a run, etc.
And increased leisure time has been linked to enhanced immune systems, improved flexibility, better memory, reduced stress, higher self-esteem and better-quality sleep.
Combined, these benefits can quickly lead to a healthier lifestyle…and therefore greater longevity.
So as you work towards your goal of growing your wealth, keep in mind that material possessions are just one part of it…but it’s nothing compared to the gain you could make in your most precious asset — time.
Editor, Money Morning New Zealand