The investment with the highest rate of return
First published 27 March 2015 • Updated 25 July 2017
We all know time is money – but it’s not quite as simple as that. Here’s the trick to investing them both in the wisest possible way.
In which economy can you find the wildest exchange rates? Give up? It’s not in any country. It’s in that clock on the wall.
A minute of your time isn’t worth as much as a minute of mine. Except sometimes. And sometimes your minute is worth two of my hours. Because it depends on how we’re spending that time, and what we hope to get in exchange for it.
A senior executive wastes two hours prodding at his laptop in frustration. The IT technician could have fixed the fault in five minutes. Because of the delay, the company director wastes half a day sorting out an issue that the senior executive could have handled in half an hour. So five minutes of the IT expert’s time is suddenly worth many hours of the company director’s.
Most people could fix a dripping tap with the right tools and a complete set of instructions. But it would still take most of us far longer than it would take an experienced plumber (and we might also worry if we’d done it right). And what else could you have been doing if you hadn’t been fiddling with washers? What could you have achieved with that time by doing something you’re good at?
That’s the exchange rate of time. We get most value from it when we spend it doing what we do best, or what we most want to do. When we spend it ‘abroad’ – that is, on things we don’t want to do or aren’t so good at – then we can get a raw deal.
The digital age makes it tempting for the layperson to have a go at many unfamiliar tasks, from plumbing to financial planning. A vast array of online information and tools means that people may feel empowered to make their own financial decisions. But feeling empowered isn’t the same as being it.
The web is a notorious free-for-all. It can be hard to distinguish fact from opinion, or to tell what is simply good marketing. Even with information sites that you know to be reputable, you still have to apply that knowledge to your own situation, with no independent confirmation that you have done this correctly. It’s possible, of course, and some will find it easier than others. But conducting and then checking your own research is inevitably time-consuming, and like the DIY plumber you will still have those doubts about whether it is really watertight.
By contrast, a single hour spent with a financial adviser could be worth many days of your own time, which you might otherwise waste in tedious web searches, reinventing wheels that your adviser already has in stock. You should find that the value of advice goes beyond any monetary returns on your investments, because the saving on time, effort and stress is beneficial in its own right. After all, you could be using that time to make more money to invest. Or better still, enjoying the fruits of spending it.
Start to discover the value of advice with a free financial health check from a regulated adviser – with £50 off their first fee if you go back for more.
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