November 14, 2007

ROI - Time

I'm a week or so into my retirement I realize that a huge portion of my life is dealing with time. I need to figure out how to value it, how to spend it, how to save it - the classic saying, "Time is Money" rings truer in retirement than any other time in my life. I spent today reflecting on this issue while doing other chores and I thought I would do well to share with my readers.

Unlike money, time is a finite resource. I only have so many hours to live and I should spend the time I have as productive as possible with focus on the things I want out of life. On the other hand, doing these productive things costs money. If I go to the movies, if I take a pottery class, if I go out for dinner, if I want to surf the internet, I would have to pay for each thing. I need to figure out what I can afford to do that would minimize the amount of money it takes as well as maximize the amount of time in which I am doing what I want to do.

Lets start with an example. Let's say theres a whole laundry list of things I want to do - things that I would consider productive with my time. Here are two examples: Taking an art class and watching a movie. The art class costs 100 dollars + art supplies for 5 one-hour lessons. Watching a movie would cost 10 dollars - 20 if I have a date.
So comparing the two, let's say I'm a loser and I go watch a movie by myself and it costs me 10 dollars /2 hours. Comparing this to the art class, it would cost 20 dollars / hour. It seems that the no-brainer decision would be to watch a movie. However, I also factor in how doing either of these things affect the rest of my free time. Watching a movie might give me an additional hour or two of entertaining conversations with friends. Learning to paint, however, will not only give me a potential source of revenue but will also provide hours of productive time spent practicing and using the skill. Needless to say, I went with the art class with the assumption that I will turn the time I have in the future into something more productive than I would have if I had went and watched a movie.

I started applying this to all the decision making I did with how to spend time. Things like paying for broadband internet and buying a data plan for my iphone were justified because of the large amount of productive time I spend on them - the cost would likely be pennies to the hour. I also decided to cut back on fancy and extravagant eating (this one was a painful thing to do) because fancy food costs me tens of dollars to the hour. I only can be full for so long before I have to eat again, no matter how amazing the full-bodied sauvignon blanc went with the balsamic gastrique duck. While I will miss the fine dining, the amount of time and money I save by not going to dinner parties will contribute significantly towards my retirement. At the same time, I will be able to spend that time painting.
And on that note, I set my plan in action.

...I'm kind of hungry. I'm going to go paint.


Lylah said...

Great point - "fancy food costs me tens of dollars"...and very true point!


Crystal said...

I like your perspective of the "new starving artist" concept.