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On the other hand, equating time (especially work time) with money helps with making sense of what money is actually worth. These days every product category is

On the other hand, equating time (especially work time) with money helps with making sense of what money is actually worth. These days every product category is full of well presented temptations in any price range. The correct way to evaluate a 1000$ phone, a mechanical keyboard with custom keycaps, fantastic coffee machines and barbecues and car parts and designer handbags is to put them in relation to "how many hours do I have to work for this purchase".

skilled 8y ago
Your approach also helps to illuminate the day to day spending and associated habits. Rather than thinking in terms of a monthly paycheck, I can think in terms of, "How much money did I spend today and how much did I make?".
notahacker 8y ago
It's also arguably even better for evaluating whether it's worth trying to spent time trying to get a $20 discount...
- Chris2048 8y ago
  Discounts/ loyalty cards need to be treated the same. Some aren't even worth finding in your wallet for the measly discounts they give. Many just exist to prevent you comparing prices elsewhere.
blazespin 8y ago
Yeah, exactly. Maybe we could all just stop spending less money, then we'd have more time. There's a well known correlation between people who make more money, tend to feel the need to spend it[1]. 1. https://www.quora.com/Do-most-people-spend-more-when-they-make-more-money https://www.quora.com/Do-most-people-spend-more-when-they-ma...
- ahartmetz 8y ago
  "The wealthy tend to spend less of their increase in income than do poorer people" I rather think that the causality is the other way... if you don't spend money just because you have it, you're going to be wealthier.
  - moorhosj 8y ago
    Having more money gives the option to spend it or save it. When you make $40,000, you don’t really have the option to save much compared to people making $100,000.
  - rurp 8y ago
    I think it's mostly as simple as money having marginal utility. The first $30k a person make per year goes to absolute essential (ie. food, housing). The next $30k goes to really nice the have things like better transportation, medicine, etc. As a person makes more money, each additional dollar has less of an impact on their life.
    - ahartmetz 8y ago
      That is also true. But I don't like the original article treating "being wealthy" as the, uhm, chicken?, in this chicken-egg problem.
pault 8y ago
This is why I don't pay much attention to small discounts, especially when it requires handing over your PII. Also, a half day's work for a custom keycap set is a no-brainer. :)
dsr_ 8y ago
A thousand dollar phone is a thousand dollars; we invented money in order to have a universal metric of value when comparing things like "working in the fields", "bucket of nails" and "cuckoo clock". These days, most people, most of the time, can't decide to work 20 hours more in order to afford a new thingy. If you're on salary, that's it. If you're an hourly worker with your hours assigned by management, that's it. They are unlikely to assign you overtime, too. If you're a freelancer with jobs coming in, you might get paid per hour -- but there will be a cap on your hours. Or you get paid per job, in which case there is a cap on the money available, and working faster will enable you to have more free time but not more money. Very few people always have extra work available for them to do when they decide that they want to work more; those who do tend to either be financially secure or in dire circumstances.
- shhehebehdh 8y ago
  You can’t directly increase your income by working one more hour if you are salaried . But you can certainly affect your growth trajectory by working harder/longer/smarter. You trade the marginal hour in a way that has a lagging, probabilistic increase on your salary.
  - celeritascelery 8y ago
    > working harder/longer/smarter. You trade the marginal hour in a way that has a lagging, probabilistic increase on your salary. I feel like that has a really poor ROI when you look at from a time spent perspective. The amount of extra hours/effort you have to put in to get a small increase chance of a promotion seems a very bad trade. Obviously I don’t have any data to back that up, but I feel that a lot of people invest a lot of effort for a minuscule chance of improved future income.
    - shhehebehdh 8y ago
      If it’s only a small increase in your chance, then yeah the roi is bad.
- UweSchmidt 8y ago
hackathonguy 8y ago
I completely agree, but would like to note a common fallacy following this logic. If my hourly rate is $20, I might think that a $200 phone is worth 10 hours. The thing is, the majority of those $20 I make are probably already allocated to things like rent, food, transportation and so on. If those things account for 50% of my expenses, for example, the $200 phone is actually worth 20 hours of my time. (That is, unless all my necessities are already accounted for, and I'm working 10 hours on top of what I usually work to buy the phone.) It's important for freelancers to account for what is essentially their "operating expenses" when making purchasing decisions.
- OJFord 8y ago
  You could do it like that - subtract 'essentials' (for some definition) from your hourly rate - but you don't have to. You could also say your rent et al. are X hours, and watch you don't 'spend more hours' than you work.
- twic 8y ago
  If you earn twice as much one month, you don't spent twice as much on rent, groceries, or commuting that month. You do spend more than twice as much on tax, probably should spend twice as much on savings and pension contributions, and probably will spend twice as much on living large. So surely it's important to account for the marginal cost of spending money, but not operating expenses?
- Valakas 8y ago
  Indeed. I use something instead called "savings rate". How much per hour of the money I make is not spent in basic stuff? I also go one step further. In calculating this savings rate, i add to the 40 work hours, much more that are spent for work and/or are not actually free time: commuting, dressing for work, shopping basics, washing dishes/clothes, ... etc. From there you get the real non-free-time-cost of anything non-basic you buy. Turns out things are much more expensive than they actually seem like.
mark_l_watson 8y ago
+1 this is what I also came here to say. I have mostly worked as a remote consultant in the last 25 years. My wife and I talk about large expenses costing how much of my time. This leads us to spending a lot of money on travel because we love to see new places and not so much money eating out and we own a modest but nice house. Another thing about time vs. money: I found that it feels really empowering to turn down jobs that are not a good fit: consciously giving up money when I wouldn't learn from or enjoy a project and allocate the time to spend with friends and family or learning new things.
taude 8y ago
I've done this for 20 years. In fact, when I was out of college, I was a SDE at a top technology company. My personal motto was that I should never own a car that costs more than two months of my salary. All my other young counterparts were doing dumb things, like buying really fancy cars when our first tranche of stock options vested Even today, I think about the cost of money in my time, since I value doing thinks over owning things. I typically justify buying nice laptops with a three year amortiziation, but cell phones, I buy cheaper ones because I've broken so many.... (And that mechanical keyboard, surely a $100 for something that will last several years while performing your job 10 hours/day is a worthy investment, if you're into that.)
lm28469 8y ago
Until you break the cycle. You can live a good life on 3 hrs of work a day as a developer. Working full time in today's world is complete non sense. But people who see everything through the lens of consumption have a long way to go I guess. "When economic necessity is replaced by the necessity for boundless economic development, >>> the satisfaction of primary human needs is replaced by an uninterrupted fabrication of pseudo-needs <<< which are reduced to the single pseudo-need of maintaining the reign of the autonomous economy." - The society of spectacle

skilled 8y ago

Your approach also helps to illuminate the day to day spending and associated habits. Rather than thinking in terms of a monthly paycheck, I can think in terms of, "How much money did I spend today and how much did I make?".

notahacker 8y ago

It's also arguably even better for evaluating whether it's worth trying to spent time trying to get a $20 discount...

Chris2048 8y ago
Discounts/ loyalty cards need to be treated the same. Some aren't even worth finding in your wallet for the measly discounts they give. Many just exist to prevent you comparing prices elsewhere.

blazespin 8y ago

Yeah, exactly. Maybe we could all just stop spending less money, then we'd have more time. There's a well known correlation between people who make more money, tend to feel the need to spend it[1]. 1. https://www.quora.com/Do-most-people-spend-more-when-they-make-more-money https://www.quora.com/Do-most-people-spend-more-when-they-ma...

ahartmetz 8y ago
"The wealthy tend to spend less of their increase in income than do poorer people" I rather think that the causality is the other way... if you don't spend money just because you have it, you're going to be wealthier.
- moorhosj 8y ago
  Having more money gives the option to spend it or save it. When you make $40,000, you don’t really have the option to save much compared to people making $100,000.
- rurp 8y ago
  I think it's mostly as simple as money having marginal utility. The first $30k a person make per year goes to absolute essential (ie. food, housing). The next $30k goes to really nice the have things like better transportation, medicine, etc. As a person makes more money, each additional dollar has less of an impact on their life.
  - ahartmetz 8y ago
    That is also true. But I don't like the original article treating "being wealthy" as the, uhm, chicken?, in this chicken-egg problem.

pault 8y ago

This is why I don't pay much attention to small discounts, especially when it requires handing over your PII. Also, a half day's work for a custom keycap set is a no-brainer. :)

dsr_ 8y ago

A thousand dollar phone is a thousand dollars; we invented money in order to have a universal metric of value when comparing things like "working in the fields", "bucket of nails" and "cuckoo clock". These days, most people, most of the time, can't decide to work 20 hours more in order to afford a new thingy. If you're on salary, that's it. If you're an hourly worker with your hours assigned by management, that's it. They are unlikely to assign you overtime, too. If you're a freelancer with jobs coming in, you might get paid per hour -- but there will be a cap on your hours. Or you get paid per job, in which case there is a cap on the money available, and working faster will enable you to have more free time but not more money. Very few people always have extra work available for them to do when they decide that they want to work more; those who do tend to either be financially secure or in dire circumstances.

shhehebehdh 8y ago
You can’t directly increase your income by working one more hour if you are salaried . But you can certainly affect your growth trajectory by working harder/longer/smarter. You trade the marginal hour in a way that has a lagging, probabilistic increase on your salary.
- celeritascelery 8y ago
  > working harder/longer/smarter. You trade the marginal hour in a way that has a lagging, probabilistic increase on your salary. I feel like that has a really poor ROI when you look at from a time spent perspective. The amount of extra hours/effort you have to put in to get a small increase chance of a promotion seems a very bad trade. Obviously I don’t have any data to back that up, but I feel that a lot of people invest a lot of effort for a minuscule chance of improved future income.
  - shhehebehdh 8y ago
    If it’s only a small increase in your chance, then yeah the roi is bad.
UweSchmidt 8y ago

hackathonguy 8y ago

I completely agree, but would like to note a common fallacy following this logic. If my hourly rate is $20, I might think that a $200 phone is worth 10 hours. The thing is, the majority of those $20 I make are probably already allocated to things like rent, food, transportation and so on. If those things account for 50% of my expenses, for example, the $200 phone is actually worth 20 hours of my time. (That is, unless all my necessities are already accounted for, and I'm working 10 hours on top of what I usually work to buy the phone.) It's important for freelancers to account for what is essentially their "operating expenses" when making purchasing decisions.

OJFord 8y ago
You could do it like that - subtract 'essentials' (for some definition) from your hourly rate - but you don't have to. You could also say your rent et al. are X hours, and watch you don't 'spend more hours' than you work.
twic 8y ago
If you earn twice as much one month, you don't spent twice as much on rent, groceries, or commuting that month. You do spend more than twice as much on tax, probably should spend twice as much on savings and pension contributions, and probably will spend twice as much on living large. So surely it's important to account for the marginal cost of spending money, but not operating expenses?
Valakas 8y ago
Indeed. I use something instead called "savings rate". How much per hour of the money I make is not spent in basic stuff? I also go one step further. In calculating this savings rate, i add to the 40 work hours, much more that are spent for work and/or are not actually free time: commuting, dressing for work, shopping basics, washing dishes/clothes, ... etc. From there you get the real non-free-time-cost of anything non-basic you buy. Turns out things are much more expensive than they actually seem like.

mark_l_watson 8y ago

+1 this is what I also came here to say. I have mostly worked as a remote consultant in the last 25 years. My wife and I talk about large expenses costing how much of my time. This leads us to spending a lot of money on travel because we love to see new places and not so much money eating out and we own a modest but nice house. Another thing about time vs. money: I found that it feels really empowering to turn down jobs that are not a good fit: consciously giving up money when I wouldn't learn from or enjoy a project and allocate the time to spend with friends and family or learning new things.

taude 8y ago

I've done this for 20 years. In fact, when I was out of college, I was a SDE at a top technology company. My personal motto was that I should never own a car that costs more than two months of my salary. All my other young counterparts were doing dumb things, like buying really fancy cars when our first tranche of stock options vested Even today, I think about the cost of money in my time, since I value doing thinks over owning things. I typically justify buying nice laptops with a three year amortiziation, but cell phones, I buy cheaper ones because I've broken so many.... (And that mechanical keyboard, surely a $100 for something that will last several years while performing your job 10 hours/day is a worthy investment, if you're into that.)

lm28469 8y ago

Until you break the cycle. You can live a good life on 3 hrs of work a day as a developer. Working full time in today's world is complete non sense. But people who see everything through the lens of consumption have a long way to go I guess. "When economic necessity is replaced by the necessity for boundless economic development, >>> the satisfaction of primary human needs is replaced by an uninterrupted fabrication of pseudo-needs <<< which are reduced to the single pseudo-need of maintaining the reign of the autonomous economy." - The society of spectacle