Money buys you time

When I quit my job working at Booz Allen Hamilton at the age of 29, I was making a great salary at a stable job I enjoyed.

Thinking back, it seemed a little crazy.

I quit my job at a defense contractor, where I was using my six-figure college education, when I had a top secret clearance, to work at home on a blog.

When I told my parents, all my dad said was “are you sure?”

Original: Eder Pozo Pérez
Original: Eder Pozo Pérez

I was.

The blog had been out-earning my salary by a significant margin for a while and it had reached a point where I felt I had to devote my full time.

How did I convince myself that leaving a good, stable, growing career for an unpredictable future with an untested business model was a good idea?

I bought myself time.

The first year of the site, it earned about $3,000. The year I quit my job, a few years later, it was 4-5X my annual salary.

The way I figured it, the business had bought me 4-5 years. Each subsequent year bought me even more runway and, if I was fortunate, I could grow the business and the runway would lengthen even more. I could quit my job to do work on the business because I had saved enough income to pursue it full time.

I retired. (though I didn't call it that)

Replace “quit my job” with “retired,”
Replace “work on the business” with “do whatever I wanted,”
Replace “I saved enough income” with… oh wait, no keep that.

The money you save from your work buys you time.

The reverse is also true, your time at work is merely “buying” more money.

It's as simple as that.

The more you are able to save, then subsequently invest to grow, the sooner you can leave your primary job and do whatever you want – including more work.

The devil, however, is in the details but the equation is exactly the same.

As you save your money and invest it, think about how much time those investments are buying you. If you investments pay dividends, how many hours a year is that investment “working” for you?

If you save up $10,000 and invest it in a dividend stock, say Coca-Cola, and it generates $343 a year – how many hours a year of work has that replaced?

If you make $100,000 a year, that's about $50 an hour. $10,000 in KO will replace 6 hours, 51 minutes of work every single year.

String up a few of those together and you have yourself a retirement.

It actually replaces more time after you account for taxes. Ordinary income is subject to FICA and your marginal tax rate. Dividend income currently enjoys must lower tax rates.

One final thought before we go – money is a theoretically limitless resource.

There are no constraints or other physical limits. It's a man-made symbolic creation but time isn't. You only have so many heartbeats on this Earth.

Cash rules everything around me, but Father Time is undefeated.

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Jim Wang

About Jim Wang

Jim Wang is a thirty-something father of three who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and a farm in Illinois via AcreTrader.

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  1. Viet says

    It wasn’t until I reached a certain age (and then starting making enough money) that the concept of time vs. money really hit you.

    When you’re wealthy/well-off – money buys you significantly amount of time/options. Think about when you fly first class. You generally don’t stress too much about arriving to airport early as you’ll get into the priority lines (extremely fast at select well run airports). Kick that up to private jet/chartered flights and you get dropped off at the strip/airport. Grab your bags from the driver – walk onto the plane and off you go.

    Awhile ago when I was living/working in San Francisco- I thought public transportation was incredibly convenient vs. what was available in LA/OC area. I can get to almost any point in the city by using the Muni. Awesome!

    Until you really use it day-in and day out and realize how much of a time sink it is to stand there and wait. A trip that may have taken 15-30 minute in car/bike becomes an hour+. Gotta make a connection/transfer? Better add in more time buffer.

    And there in lies what low-income people have to deal with day in and day out. There’s a lot of waiting involved. Gotta work at 8am but don’t have a car? Better head out 5-6am to the bus station to make sure you get to work on time.

    Your last thought on money is a limited resource is spot on . It isn’t about greed but more-so there technically isn’t a limit in the wealth you can generate, thereby buying yourself more time to do things that’s truly important to you (vs. standing around waiting – no matter your station in life).

    • Jim says

      Mass transit, especially in the suburbs, is tough. It takes me 11 minutes to drive to the nearby mall, it would take the bus about an hour. It’s 5x longer and it’s a direct bus ride.

      I always felt that movie In Time was really reflective of our lives. In it, there’s no money, just time. After a certain amount of time, you die. You pay for everything in Time and the rich have a ton of it, the poor don’t have enough and live on the margins.

  2. Christina @ Northern Cheapskate.com says

    “The money you save from your work buys you time.”

    This is so true. In my case, saving my salary from when I was working allowed us to build a nice emergency fund for when I quit my job to be a stay-at-home mom.

    For others, that money saved can mean that you can take a new job (even a (gasp) lesser paying job) when you’re burned out at your current place of employment.

    And we don’t like to think about it , but that money saved can be the cushion you need when an unexpected illness or death derails everything in your life. It will buy you time to heal.

    When you have control of your money, and you can stay out of debt, you have bought yourself an amazing amount of freedom.

    • Jim says

      So very true Christina, thank you for sharing your thoughts.

      I think sometimes we work so hard and for so long that we forget what’s important, sadly it might be an illness or death that brings it all back into perspective.

  3. Melissa says

    It’s interesting to me how my perspective on time has shifted. In a few short years I’ve started to feel the brevity of the time we have- it’s not very much and it goes by so fast.
    It was earlier last year when I started to get frustrated at the amount of hours I put in working to achieve someone else’s goals while mine go undone because of the lack of time to spend on them. I’ve been working to change where I put in my time- thanks for the needed boost of encouragement!

    • Jim says

      You’re very welcome!

      It’s tough to push yourself to work on your own goals when so much of our life we’re taught to follow a certain path. Get a job, work hard, and then work on your “own thing” in the wee hours of the night if at all — then repeat. Over and over again. Then retire after 40+ years.

      But if you’re able to make a small shift, start saving a little bit more, you can buy back your time bit by bit.

  4. DivHut says

    Great story. Money does buy time. Time to do what you please. I always believed in that which is why I became an earnest dividend growth investor a while back. Investing solely in dividend paying stocks to create that ever increasing passive income stream. I also was fortunate to start my own business online back in 1998 and have made a living online since then. Working for yourself is a great way to manage your own time. Thanks for sharing your personal story. Have a great weekend.

    • Jim says

      Thanks for stopping by and sharing your thoughts. I love dividend investing because it’s really one of the few “passive” income streams (I hate the term passive because to be a successful investor there’s still work involved… but it’s not like landlording), I’m glad I discovered it and the “philosophy” behind it. And I really do love the increases every year from solid companies. 🙂

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