This is the fourth installment in the elasticity of time series in which I argue that we are not at the mercy of the passage of time; instead, we can take steps to make time more elastic. This installment is devoted to the topic of time as it relates to money.
One of the main ways in which most of us spend our time revolves around money. This includes finding ways to make money, learning how to take care of our money—for example, taking a personal finance course–trading our time for money if we hold a job, investing our time in a business in order to generate a profit, and so on. Therefore, by finding ways to produce money more efficiently and effectively we are, in essence, creating time.
Below you’ll find four ways to increase the elasticity of time by spending less time creating the amount of money you need to lead the lifestyle you desire.
Cut Costs – Identify Where You’re Leaking Money and Time
In “Simpleology 102: The Simple Science of Money”, Mark Joyner explains that the Grand Law of Wealth is the following: increase your incomings and decrease your outgoings. We’ll look first at the second half of this equation. By reducing costs you’re in effect reducing the amount of income you need to create in order to reach your target amount, therefore reducing the amount of time you need to apply to the activity of making money.
There are many ways to cut costs, and “The Art of Achieving Financial Freedom” ecourse created by “The Financial Freedom Society” offers a good example: spend a couple of hours reviewing your insurance coverages with your agent. Review each policy benefit and how much it costs you and decide what you really need.
- Are you paying for medical coverage under your auto policy when it’s already covered under your health insurance policy?
- Do you understand what each feature you’re paying for will do for you?
- Should you increase your deductibles?
If you can find ways to save money each month by reducing your insurance expenses, then the few hours you invest in reviewing your coverage will be time well spent. Next, go down all of your expenses and explore which other ones can be reduced. Do you really watch all the cable channels you’re paying for? Can you start eliminating debt to reduce your monthly interest payments? Where else are you leaking money and, therefore, time?
Choose an Efficient System
Mark Joyner adds that money is created by entering time, energy and money into a system. A system can be a business you’ve built, a stock you’ve invested in, a franchise you’ve purchased, a job you hold in a company, and so on. Some systems render better results—that is, are more efficient–than others.
For example, a stock may render a 4% return on investment (ROI) whereas another stock may render an 8% ROI; clearly, the second stock is a much more efficient system than the first. There are many jobs that are highly inefficient: regardless of how much time and effort you invest, you get very little in return. One of the best ways to use your time effectively is to choose an efficient system.
Continously Improve the System
One way to improve the system you’ve chosen is to increase the intensity. “Simpleology 102” explains that if a system is even slightly efficient, by increasing the amount of input, you will increase your output. For example, if you have an online business and you’re running a pay per click ad campaign which is doing well—lots of people are clicking through to your landing page and the page has a high conversion rate—it makes sense to increase your budget and continue to run the profitable campaign. The more money you put into the ad campaign, the more money you get out of it.
Keep in mind that some systems are so inefficient that ramping up the amount of time, energy or money that you insert into the system will not increase your output. If this is the case, you need to switch to a more efficient system.
You can also improve a system by making it more efficient. Here’s an example: if you can automate some of the things that are taking you a lot of time to complete, you’ve increased the efficiency of your system. For another example of increasing a system’s efficiency, if you can increase the rates you charge your clients, without losing a significant amount of clients, you’ve made your system more efficient; you’re doing the same amount of work but are getting more money for it.
If you create “back-end” products to sell to your clients so that existing customers buy more from you, you’ve also increased the efficiency of your system. Once you’ve chosen an efficient system your task is to find all the ways you can to improve it.
In addition, once your current system is running well you can chose to start adding additional systems.
Use the Power of Leverage – Mass Production
Use the power of leverage to get greater performance from your time and money. One of the best forms of leverage that exists is to be a person of mass production. To illustrate, compare a teacher with a book author. Teachers usually have about twenty-five students per class. This means they have very little leverage—they apply their time to an activity that reaches a small number of people—and therefore they tend to earn a low salary.
Now think of Jack Canfield and the “Chicken Soup for the Soul” book which he co-authored. The book was written once and was bought by millions. That is, he invested his time in an activity—the creation of a book—that reached millions of people. In addition, once the book became a hit the authors leveraged the “chicken soup” brand into many other books (e.g., chicken soup for the teenage soul, for women, and so on). Then they further leveraged their brand by adding other products, such as chicken soup calendars. Tens of millions of these products have been and continue to be sold.
By being a person of mass production you’ll be using the power of leverage to achieve an amount of wealth in a few years that would take people with little leverage many, many years to create, if at all.
Conclusion
By making a decision on how much money you need to lead your desired lifestyle, and finding more efficient ways to reach that target–such as the four ways presented above—you’ll be freeing up time which you can then put to uses other than making money. In other words, you’ll be making your time more elastic.
Related Posts:
- The Elasticity of Time (Part 1)
- The Elasticity of Time (Part 2)
- The Elasticity of Time (Part 3)
- Six Ways to Do Less and Achieve More
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