Time is your friend
Finance folks love to talk about exponential growth. It’s compound interest. Interest on interest. It’s your money making money on its money. You start with $100 and then earn 10%. Now you have $110. Another 10% gets you $121. Then $133…on and on until the numbers get huge.
For us visual learners, compound interest looks something like this:
As time goes on, your money grows at a faster and faster rate.
Time is your friend.
Compound interest is truly a wonderful and amazing thing. If you stick around long enough it does wonders.
That’s true if we are talking about your portfolio, learning a new skill or investing in your family and relationships.
Time is your enemy
However, there’s an equally opposite true statement: when time is short, the value of that time is incredibly high.
For instance: Who’s ever been on a week-long vacation and then realized you only have 2 days to go, so there’s a greater urgency to do the things you wanted to do? Or maybe you’ve experienced this: a loved one being sick and that time that you spend with them is of utmost importance.
Waiting only decreases the value.
In graphical form, that line looks like this:
Matt tells me this when I ask him why he left one of the best paying jobs in the world (working at a top hedge fund): “It’s hard to overstate the value of the next 5 years.”
In 5 years, my kids will be 11 years old.
What parent with now grown kids wouldn’t want to go back to their kids being 6-12 years old to change or relive those moments?
These next 5 years is high value time. How am I going to live it?
The fact is this is true at any point in time for anyone no matter how young or old you are. If you’re sitting at a young sapling age of 70, what do the next 5 years mean to you? Maybe your grandkids will have graduated. Maybe your health won’t be where it is today.
When we run financial plans, we try to plan for people to live as long as possible to guard against longevity risk. But there’s no guarantee for that!
How are you going to live the time that you have today? The next 5 years?
Paradox of Time
I call this the “Paradox of Time”. By adding time you can increase your wealth and relational capital exponentially, but by delaying you could miss out on something that is very important.
We have to hold this tension.
The only solution I can offer (if there even is one) is to say: the more intentional you live today, the more exponential tomorrow will be. We have to make investments of our time and energy into something. Everyone does – whether its school, work, building friendships, or doom scrolling through YouTube. We’re all investors. The question is: what outcome are you investing for?
Everyone wants to get from A to Z, but they forget that it involves going through B to Y.
Be a “B to Y” person.
Mark Bertolini, CEO of Oscar Health, said this, “Remember, you will die. So with that in mind, every day…ask yourself, am I spending my time with the right people doing the right things? And if you’re not, run.”
Run. Time is short and the payoff for making intentional effort is exponentially worth it.
