Tuesday 30 October 2007

Some people spend time to save money, others spend money to save time

by Ronnie Apteker

Time is more valuable than anything. I know, I am stating the obvious but when it comes to time I am becoming more and more selective about where I spend it. Perhaps it was turning 40 this year that triggered this, or perhaps I am just too busy these days and I am desperate not to waste any time. And perhaps I just need a break. Hang on, do I have time for a holiday? Ok, now I am wasting your time. Let’s move on.

I have invested a lot of time and resources into various computer projects and movie ventures this past year. And I am always intrigued when I hear film makers talk about the risks they are taking. Let’s see, I work from sunrise to sunset 7 days a week, and I put in the money and then, I keep hearing about the risk that everyone is taking. What risk?

Now I am not trying to trivialize anyone’s role or contribution, but I do battle to understand how a 21 year old university graduate can say that they are taking a risk by making a film. If the film doesn’t work (which is the case most of the time) then I lose some money and life goes on. What risk did the film maker take? I, on the other hand, am not straight out of university, and I have opportunities thrown at me each week. When we embark on a new project that means I have to turn these opportunities away. There is a cost to this. But, I am often told how we are all sharing the risk. It almost sounds like we are all in it together as equal partners.

Let’s assume for this discussion that we have indeed split the costs. Let’s assume that we have all made a financial investment. Yes, then we are all at risk But in terms of the time factor, how does one put a value on the time they have invested? One simple answer could be that if you are offered a job opportunity that pays, say, a million dollars a year, and you turn it down, then your cost for that year could be said to be a million dollars. But if you were unemployed, straight out of university, and you spend a year on a new project, then what opportunity costs have you foregone?

My conclusion is that it is most often very difficult for people to understand the true costs of doing business. People in different situations with different track records cannot value their time the same. Yes, an hour of my day is the same as an hour of your day. But, if I had the potential to earn, say, a million dollars an hour, and I took an hour off, then that million dollars would have to be considered. And, if another person was earning say, 100 dollars an hour, and they took an hour off, then the financial component here is quite different. And this is the point I am trying to make. Yes, I know this requires a great deal of sensitivity as people get very defensive when you imply that someone’s time may be more valuable than yours, but this is a very real consideration. The value of human capital is not an easy thing to understand and we all tend to sell ourselves short.

I once heard a saying which said that some people spend time to save money while others spend money to save time. I have been very fortunate in my life to have been financially independent from a young age. I always look to spend money to save time because I really battle to find the time to process all the opportunities that exist around me.

I have people telling me every other week about how they don’t like to have their time wasted and yet it is often these same people that will then go and get stuck in traffic for hours going to pick up their dry cleaning. This makes no sense to me. I would rather pay someone to collect my dry cleaning because that time that I save is more valuable to me. But, I guess one needs to understand the value of their own human capital or potential and then one would not be so quick to voluntarily get stuck in traffic.

Now consider those who travel business class. I do sometimes, but not too often. I would rather give the money to those who need it. Business class, like many other privileges, is not about saving time. We all arrive at our destination together, at the same time. Business class is about comfort and status. It is about luxury and relaxation. This is not to be mistaken with saving time. It is always intriguing to me that the same people who allow themselves to get stuck in traffic for hours also put up a big fuss when it comes to air travel.

Today’s piece was just something I often battle to put in words. I hope I have sparked some food for thought. As someone who is trying to lead people, I often have to challenge people’s thoughts and ideas. Yes, time is indeed the most valuable thing we have, and when people are aligned it certainly saves a lot of hours.