At some points in my life as a weblogger, I can push out a post once a day (or more frequently). Then there are periods where equally much is written, but they are only kept as drafts. Gradually so many drafts become stored, that the whole writing process breaks down. Sometimes notes are kept in assorted files, or made on paper, then only in the brain, as real writing stops and imagined writing begins.
For a couple of weeks now, I have been trying to write something meaningful about the time value of money. It has not been easy. At one time, about 1980, I wrote several articles on ROI (return on investment) calculations that were published in several business and trade magazines. I am even the co-author of a book that looks at the subject: Essentials of Management Science, by Morton Helbaek and Brock McLellan, Prentice-Hall, 2010. Don’t even think about buying it, not only is it overpriced for what it offers, it is in many ways outdated. Unfortunately, I don’t have any copies that I can give away.
At some fundamental level, the concept of interest rests on an assumption that money has a time component. If one needs money to buy a house now, a bank will eagerly lend it, provided there is security, but one will have to pay interest on that borrowed money. Conversely, if one saves money, interest will be paid on that saved money.
Declining interest rates, along with governments actively using inflation goals to enforce consumer spending and prevent economic stagnation, have made a mockery of this concept for the past decade. Being a surviver of paying 14% interest on a mortgage gives perspective.
At this stage in my life, with an adequate pension, I do not need to postpone pleasure now, for pleasure later. Interest rates don’t offer any encouragement. In fact, if I don’t indulge in pleasure now, there won’t be a future time to enjoy it.
When I started to write this post I titled it, The Money Value of Time. Then, I reduced it to The Value of Time. Money, when one has enough of it, becomes worthless. Most of this post was written using this title, until I had a change of heart, and re-introduced the original title.
Why? It has to do with an organization of which I am a member, that does not seem to be able to focus on the value of time. It relies on voluntary labour, which it values at the hourly rate of CAD/ EUR/ NOK/ USD 0. This reliance on volunteer labour means that this organization is unable to calculate, let alone appreciate, the value of labour inputs. It can then ask its members to engage in even the most meaningless of activities, because there is no cost associated with them.
At the moment, I am going through a process of determining my internal hourly rate. When this organization next asks me to do a task, I intend to challenge them by asking what this particular task is worth, and how much they have budgeted for it. I hope that this approach will impact them to see that there are limited resources available, that these resources have a cost, and they will have to prioritize.
Time is a valuable resource. Please, treat it as such.