1 Secret Formula for “Real Financial Success” Will Suddenly Change Your View On Life
What do you see here?
Money = Cost x Time?
or, Time = Money/Cost?
For most people, money is a liability for most of life.
We push through the weekdays while we wait for the next weekend to roll around, giving us a moment to choose how we spend and enjoy our time.
When merely working to pay the bills, 71% of every week is a total write-off.
It’s a sad statistic.
But what keeps us spending an entire life stuck in this funk?
Naturally, we approach life obeying the standard work-life formula:
Money = Cost x Time
According to this formula, money is a direct result of the negative, personal costs we pay to work a job over the time that we sacrifice.
We often believe that to be “richer,” we need more money. And if we need more money, we can expect to pay a higher cost and trade more of our precious time!
Whether it’s working extra weekend shifts or climbing up the company ladder, with more money comes a greater personal cost: more energy and health being drained, more burdens to face, and more opportunity costs to pay— in addition to more quality time being given up.
Overall, a piece of our life must be sacrificed. But that’s the price we must pay for money, right?
We chase job promotions to raise our income by a few extra dollars a week… along with raising the overtime hours, weekend call-ins, daily responsibilities, pressures, and stresses along with it!
More money? Yes.
A richer life? Hardly.
Unfortunately, it’s hard to see otherwise. From our grandparents to our parents to us, this is all we may ever know about the experience of life.
Could there be any other way?
Money vs Real Financial Success
Money should have one purpose: to add positive value to our lives.
There is clearly a connection between having more money and potentially gaining more value out of life. But as we all know, “successful” life is never defined by money alone.
Because what about the cost of money?
All money comes in context, and for every dollar of potential value that we gain, there must be some personal cost involved.
Therefore, a successful life cannot simply be based on being a millionaire or a billionaire, as not all money comes at an equal cost.
The millionaire who’s stuck working a job they hate for 10 hours a day is obviously less “successful” that the millionaire who stopped doing the job they hated 10 years ago. And of course, the millionaire who made his fortune doing what they love has really hit life’s jackpot!
Same money, but clearly different levels of personal success.
Even if you manage to amass a BILLION dollars to your name, this money has little value if you have to spend your entire life trapped in some airtight, corporate office. This big pile of money is little more than a big pile of stress and sacrifices!
So, what is real financial success?
No, it’s not defined by the number in your bank account or the price tag on your car.
Ultimately, it’s based on the positive effect money has on your life experience.
So how can we approach “The Money Game” in a way that reflects what life is really about?
The Real Rich Formula
“The rich invest in time. The poor invest in money” — Warren Buffett
To experience real financial success, our aim is not to focus on money but on time and the value we get out of it.
Of course, when it comes to the value of our time, money plays a crucial role.
So, what is the connection between money, time, and real financial success?
Real financial success is having the money and lifestyle to spend more time doing what we truly want while spending less time having to fuss and fight over money and be paying all the personal costs that often come with it.
Why do so many of us chase money without ever experiencing any greater sense of peace, freedom, and satisfaction? Because real financial success can only be experienced by those, who approach life with a different perspective and objective.
What is this perspective?
It starts with taking life’s standard formula: Money = Cost x Time and flipping our natural view.
It’s now time to see that:
Time = Money/Cost
As the formula shows, the value of our time is equal to our money divided by our personal costs — or simply, all the negatives in life that come from getting money.
With little money, the value of our time suffers. And when earning more money at a much higher personal cost, unfortunately, our days don’t get much better!
However, when we approach life with the aim to increase our money AND decrease our costs, what do we get?
More valuable time: a more valuable life.
Forget about money alone — the richer you really are, the more value you get out of your “lifetime”.
And it’s the imbalance of Money/Cost that is the key to creating and experiencing real financial success.
Saving Yourself
The “Average Joe” may believe that frugal investors are boring cheapskates who don’t know how to enjoy their money.
But what do they often fail to see?
As Henry David Thoreau once said:
“The price of anything is the amount of life you exchange for it”
The true cost of every purchase is not a number on a price tag but rather, a period of time spent working.
Some might even say a period of time wasted.
Yes, time is money, and money is time. Every expense equals an amount of life being exchanged…or lost!
After factoring in our routine living costs, taxes, and even our unpaid overtime and the daily commute, what remains is the true personal profit we gain.
We call this our “real pay rate.”
For the average earner, this may only equal a few measly dollars for each hour given up on the job.
So what is that lazy, Friday night food delivery really costing you?
Life’s True Currency
Those who struggle to control their spending and make financial progress often fail to respect the true potential of their money.
And where do they go wrong?
Simply living with the view that money = Cost x Time.
A poor mind moves through life valuing not time but money and will allow their beliefs about the costs and time involved to define, and regularly diminish its potential value.
As the money we have today is based on a cost we paid and a time we spent in the past, it’s easy to simply view our money only with respect to this past input.
Consequently, whatever we may consider “easy money” becomes money easily spent. (Yes, we all love to blow an unexpected tax return!)
Or we move on from our past grind and allow the true sacrifices we made for our money to fade into the past. Over time, we start to lose a sense of the relative value of our spending in comparison to what we really gave up.
And what about the future?
We fail to respect life’s ultimate objective: to maximize the value of our time.
Although the money in your bank account is an accumulation of past costs and time, every dollar from the past has the potential to help reduce your future costs and time and add value across your entire journey.
“Time is life’s true currency, and every dollar has the potential to improve our future exchange rate”
The Price of Life
In the wise and misquoted words of Benjamin Franklin, a dollar saved is a dollar earned.
Every time you save a dollar, you earn yourself a dollar — at your real pay rate — literally for doing nothing and using zero time.
And for the smart investor, a dollar saved is just the beginning!
Through the nature of passive income and the power of compound growth, every dollar can be used to make more money in the future at a lower personal cost.
Thus, our imbalance of Money/Cost continues to shift as our personal wealth grows.
On the flip side, by spending half of your savings this week, what you may really be spending is half a week’s time today and potentially months of your time in the future!
Even small improvements in your daily routine can have a massive impact on your future money and life. By choosing to do less mindless spending and more investing, you can help to maximize the value of your money and the net value of your time.
Where Are We Going?
Money fuels the journey of life. But is your plan to spend the entire journey stuck at the gas station, refilling your tank?
You probably have a million things to tick off your bucket list. And of course, spending half a century inside an office cubicle is probably not one of them!
Our true aim for the future can only be to maximize the amount of our life that we spend experiencing more personal value at a lower personal cost.
So why not afford more freedom with money?
Those who want more out of money really want more out of life.
Being in control of money can afford us the opportunity to try new things, explore new options and find greater value.
And one day, if our money is making enough money to satisfy our living costs, we have the freedom to bail out of the workforce entirely and start living a financially independent lifestyle.
What many long-term investors are out to control and maximize in life is their personal time: their valuable, free time.
One ultimate goal of wealth creation is to replace all burdening active income (Money = cost x Time) with savings, retirement funds, and low-cost, passive income.
Remember, Time = Money/Cost. By allowing money to one day be doing all the work for us, we can gain sufficient value at a low personal cost, and thus, experience one aspect of real financial success.
By shifting our natural perspective and focusing on our life-long imbalance of Money/Cost, we can help to build a positive link between our money and the future.
Final Thoughts
Our true aim in life can only be to maximize the amount of our time that we spend in a way that we consider more personally valuable and less burdening.
Never forget, Time = Money/Cost.
The aim of real financial success is to boost the value of your time by maximizing your money in balance with minimizing the negative costs.
And it takes a natural focus in life towards:
1. Making money doing what you enjoy
2. Creating passive income
3. Aiming to get the most value out of every dollar
All money comes at a cost, and those who are out to experience their best life recognize the net value of every dollar…and every day.
This is the secret to real financial success!
