Time is Money

Where Borrowers Find Loan Approvals

Time is Money

Years ago I received an interesting email comparing time with money that I was enchanted by. It stated we are permitted to make withdrawals from our fictional time bank, but unlike an actual bank, we are unable to make deposits. So “spend” your time wisely was the underlying theme.

I think we can all agree that time and money walk hand and hand like Jack n’ Jill. We all want more of both. Of course to get more we usually need to sacrifice one for the other. This is the conundrum we all face. We look to maximize our opportunity cost. A good friend of mine is juggling this time/money paradox right now.

She’s enrolled in school and going for her BA. She is attending school at nights and has a full-time 9-5 job. The debate she is having with herself is, “Will this really pay off in the end?” Maybe I should just pick up a second job and work more now instead of taking these classes.

This is not an open/shut case. It’s easy for someone to stand on their perch and tell you to go to school. They are not looking at your monthly expenses. Has it been proven that a college education corresponds to higher paying jobs? Yes. Companies want to see that you have a few marbles upstairs so that BA serves as their screening process. Many won’t even call you in for an interview without it. But what is good for the goose may not always be good for the gander. I’m not exactly sure what that means but I’ve always wanted to use it in a sentence (note to self – cross that off my life’s to-do list).

When making your decision you need to consider a few things.

1. What is your earnings potential after graduation?

2. What is the cost difference of paying for school vs. working a second job?

3. What is the demand for workers in your field?

4. What is the projected long-term financial impact on your decision?

It’s easy to walk away from school and get a second job. In the short-run you will be better off monetarily speaking, but in the long run that may not pay the dividends you are looking for. Let’s break it down.

Let’s say you’re making $40,000 per year right now without your BA ($30,000 / 40hrs per week and a second job earning $10,000 / 20hrs per week).

Now let’s say you get your BA in four years and that allows you to make $48,000 per year. Would you take that deal?

You basically would be accepting 4 years of losses for a larger pot of gold at the end of the rainbow.

4-year Cost Difference

$40,000 x 4 years $160,000
$30,000 x 4 years $120,000 (plus student installment installment loans you may have accrued, say $20,00

It would take 7.5 years to get back the $60,000 in loses you initially sustained, but then it would be all gravy after that – the homemade kind too, like Grandma used to make.

                               Time It Takes to Make Up Lost Earnings

$48,000 x 7.5 $360,000
$40,000 x 7.5 $300,000

Now this scenario is very basic. I didn’t account for the interest accrued on the student installment installment loans nor did I account for you climbing that corporate latter with your BA – this is just basic math 101.

Perhaps the BIGGEST thing however is the extra hours you need to work to keep up that $40,000 earnings pace. 60 hours per week vs. 40 is huge! Think of everything you will be missing out on. You can’t put a price on time my friends. Just ask MasterCard; they love their Priceless campaign.

I do realize that spending your time wisely is a subjective art. How I elect to spend my personal time may be different than how you would spend yours. This country song I heard one time had a great line. It shelp, “Have you ever seen a headstone with these words, if only I had spent more time at work.” Spend that time wisely. We are only here for a little while.