Your Time is Worth More

You are probably selling your time for less than it is worth.

The personal value of your time gets scarcer as you age and therefore more valuable.

However employers and everyone else values what you output with your time, so unless you (spend time to) increase your effectiveness, the value of your time to them stays the same.

Let's dive into this.

You're a bright-eyed bushy-tailed American kid starting in the mail room at age 20.

You have 58.7 years until you die.

Size matters

When you retire at age 65 after a long and fulfilling career, you have 13.7 years until you die.

A year, hour, second, whatever of your time at age 65 should be worth 428% the same amount of your time at age 20 because you have that much more units of time at age 20 than at age 65.

1/13.7 ÷ 1/58.7 = 58.7/13.7 = 4.28

Over 45 years, that's a compounding of 3.77% per annum.

However, odds are slim that you retire at 428% of your starting salary, adjusted for inflation.

U.S. median wages grew at 0.35% per year between 1979 and 2019.

(Source: Economic Policy Institute)

Clearly, you say, I do not account for raises, promotions, or you being - like everyone else - above average. Fair statement.

I also do not account for illness, redundancies, time off work, or plainly being stuck in a rut.

The value of the time we have left outgrows the value others place on it. At least, that has been the case for the last 20 years.

What you do with it that counts

What if the labour market still remains the best use of your time? Work may be stagnant, but so are alternatives. You don't get better at sleep with age.

Or play with your children better.

Or play video games better.

Well, ACtually ...

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Electronic entertainment has doubtlessly improved. Compare TV in the 1980s with cable in the 1990s with the deluge of streaming options (licit and illicit) today.

To put numbers to the quality, let's consider two games.

Elite, the space trading and combat game, remains close to my heart. After I got it in 1987 I sunk hours into it.

Around 2017 I played its reboot, Elite Dangerous, and can confirm it frakkin' SLAPS!

 

Slaps how much harder?

The original Elite fit on a 1.44MB floppy. Elite Dangerous takes up 25GB. About 25,000 times more content, played 30 years apart.

You guessed it, I'm going to annualise it. Using size as a proxy, the similarly-named game with the same theme represents improvements in gameplay depth, detail, immersion, etc at rate of 20% year-on-year.

Won't somebody think of the children

Even mundane activities like child-rearing do not remain static.

Just as new recruit you expects not to stay in the mail room forever, new parent you will not be changing diapers or engaging in baby talk for the rest of your life.

Helping a child blossom into an adult is supremely fulfilling (so I have been told) indicating a tangible - if difficult to quantify - increase in quality over time.

Broadly, employment competes with alternatives that also provide better experiences over time and opportunities to build upon experience to gain mastery. The returns from these alternatives may improve faster than the returns from employment.

So even if work competed favourably against alternatives, it may not do so for much longer.

Drudge, glorious drudge.

But even if these alternatives don't change, like doing your laundry doesn't change, they can still compete at different points in time through necessity and impact, particularly as the highly contingent value of work fluctuates.

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Let's use your laundry as an example. At some point you need to get it cleaned, so a job that occupied 100% of your time, to the point where you couldn't even arrange a laundry service, would provide disutility. 

That's the argument from quantity. In terms of quality, while your work may overall be a joy, there are parts which you would rather be doing anything else. Becoming frustrated by internal bureaucracy or a stubborn client is both less impactful and less satisfying than a simple process resulting in clean fragrant clothes.

Ultimately, the choice of how to fill your time likewise becomes more valuable as your time becomes scarcer, regardless of whether you receive increasing returns from how you exercise that choice.

Egalité, Liberté

Why don't we recognise the shifting personal value of our time?

There's probably an evolutionary reason for this. We are aware of our mortality on an intellectual level. More than that risks paralysing us. If knowledge of your death is front of mind, why bother getting out of bed? You need that sweet spot of knowing you're ephemeral enough so that you don't YOLO yourself into an early grave, yet not be constantly overwhelmed by the inevitable void. To connect our impending demise to the practicalities of time management skirts that danger zone.

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A less charitable reason is laziness. A happy cognitive medium between immortality and transience is to link the value of our time to the constant units of time. This also satisfies our egalitarianism by implying that our time is equal to that of others'.

Complicating all of this is the uncertainty surrounding exactly how and when we will die. It's easier to induce that we will continue drawing breaths - just like we did five seconds ago - into perpetuity.

It is also easy to avoid this discussion because we are not granted a base value of time. No one takes us aside when we turn four years old and says, "You know that minute that went past? That was worth X dollars. In twenty years it'll be worth double."

To be clear, valuing time in relation to external markers is not what we are doing here. After all, it would be impossible to redeem those markers from a central compensating authority (which doesn't exist). Instead, we derive our conclusions by valuing time against time.

Cut for Time

Your first and last breaths are not equal. To value an hour of your time now the same as an hour five years ago is selling yourself short, as is injudiciously continuing endeavours that do not keep pace with the changing value of the time you have left.

As you age, your time matters more to you than to anyone else. Fact. We just did the math. There is no shame in acting on it.

Provocative Asides

OK stop reading two lines ago. I don't know what the following thoughts are. They're on theme but sound edgier and more divisive than I'd like. In the broader context of this piece, they're probably harmless. Just treat them like scissors and don't run too far with them.

1. Ageism makes sense if you consider that the young can accept lower bids for their time because of its abundance.
2. Longer life expectancies slow the pace of time scarcity. This allows us to tolerate projects with longer maturities and lower rates of return as we can afford to wait longer to reap the benefits. Maybe this impacts investment behaviour - a 50 year old with 20 years to live will make different calls to a 50 year old with 30 years to live - or maybe not.