1. Money

Is Time Really Money?

By March 10, 2005

In a recent discussion on the Global Capital Access Club on Ecademy, one of my favorite discussion forums for entrepreneurs, my friend Ziad Abdelnour asked the following very provocative questions (Editor's note: This is originally from the cover of T. Harv Eker's Secrets of the Millionaire Mind):

Have you ever wondered why some people seem to get rich easily, while others are destined for a life of financial struggle?

Is the difference found in their education, intelligence, skills, timing, work habits, contacts, luck, or their choice of jobs, businesses, or investments?

Is there a "money and success blueprint" out there?

There is some great discussion in response, but one reply in particular made me stop and think. One person put forth the following hypothesis:

1.Time is money
2. Knowledge is power

Physics says “Power = Work / Time”

so...

Knowledge = Work / Money

and therefore...

Money = Work / Knowledge

Well this didn't set well with me. This leads to the conclusion that the more you know, the less money you make, and that the only way to get rich is via hard work. This is simply not true empirically.

My hypothesis goes more like this:

Money = Work * Knowledge

This just makes sense. Either knowledge or work increases the money you make. If either of them approaches zero, though, so does your income.

So let's go with this for now. We'll also take the law of physics as a given, so that gives us...

Money = Power * Time * Knowledge

This rings very true. Money is power and knowledge applied over time.

So one of the original hypotheses -- those popular maxims -- must be wrong. Let's check them...

If Knowledge = Power, then...

Money = Knowledge2 * Time
or
Money = Power2 * Time
Possibly, but not obviously true. If we accept that it's impossible to have power without knowledge or knowledge without power, then I supposed it works. Let's test the other hypothesis though...

If Time = Money, then...

Power * Knowledge = 1

This implies that the more you know, the less powerful you are, and the more powerful you are, the less you know. It is again empirically obvious that this is simply not the case.

Therefore, I must conclude that in fact, time does not equal money!

Whew, that's a relief! :-)

Comments
March 28, 2008 at 10:00 am
(1) Erik Midtskogen says:

Ah, no. Your mistake is that you are assuming money to be an output, just the way that, in physics, time is an input. The equation “Knowledge = Work/Money” actually makes sense if Money is the input required to do the work (that is, either the time you spend doing the work yourself or the money you pay someone else to do it).

Money is what you put in to get work done. When you perform some business operation, you do not receive both money and work at the same time. Employees do not pay you to work for you (well, not yet, anyway). In the future, you’ll want to either keep that greed of yours in check or, alternatively, seek a bright future on Wall Street.

June 16, 2008 at 10:14 am
(2) shashish says:

it is very nice article n really i m totally surprised to read it. thanks to the writer for his great logic.

July 15, 2008 at 2:06 pm
(3) Mark says:

Erik Midtskogen: I would hope that the author sees your comment and realizes his huge mistake in thinking. Some of what he showed does make sense but it does not make sense to deduce that time is not money given his “equations.” Thank you for clearing that up. Saved me the trouble.

July 15, 2008 at 3:37 pm
(4) entrepreneurs says:

Well, the whole thing is a farce/satire. You can’t possibly have meaningful logical arguments when the terms don’t have the same meanings in different contexts. “Power” in physics is not the same as “power” in the sense of “influence”.

Erik is also correct that in the original context of the saying, “Time is money,” time is an input which you use to get work as an output. It’s used by bosses to spur people to action when they’re wasting time.

However, the same expression could be interpreted (correctly) to have money as an output, i.e., you put in your time (and effort) and receive money as an output. It depends on your frame of reference.

Anyway, like I said, the whole thing is intended as satire, along the same lines as the scene in Through the Looking Glass, Chapter 7. Yet at the same time, I hope it’s thought-provoking.

September 8, 2008 at 2:21 am
(5) RonOrr.com says:

You are thinking of time as using it like everyone else. Some people accomplish 100 times more in a day than others. We have 86,400 seconds in a day, how do you use it. Also you need to be able to use time leverage to your advantage through technology and other people.
You can not think of trading hours for dollars, the saying means that if you waste your time, you lose the opportunity cost of money you could have made, that’s all it means.

Time leverage, you can gain that through technology, you can gain that through marketing. I could simply write a 5 minute advertisement about my blog on this comment, and if 10 people on here read it this month, I used 5 minutes of 10 people’s time which = 50 minutes. I only used 5 minutes of time to type it, but used 50 minutes of others resources. Had I done that by phone it would have cost me 50 minutes of my time by calling each person 1 by 1, or I could ask for everyone’s phone number here, say go on this call at this 1 time, and do a teleconference with 10 people, and say me 30 minute speech to all 10 people at once, instead of a 30 minute sales pitch 1 after another taking up an entire day. There is multi-tasking, time paralleling, I could go on and on, check it out on http://www.ronorr.com

April 29, 2009 at 4:08 pm
(6) David says:

If you buy only $100 worth of stocks and it goes up an average of 10 percent every year then you would have over $2.1 million after 100 years. You can see that time is money.

May 15, 2009 at 7:40 am
(7) Atmajyoti Kapoor says:

We humans do as we are programmed to do, then statements like – time is money does not make any sense.

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