Time is the scarcest resource and unless it is managed nothing else can be managed.
The importance of time management is universally accepted, advised and admonished. Thus pithy quotes on the importance of time such as that of Mr. Drucker’s are ubiquitous. However I contend time is not scarce, but actually in great abundance. Everyone has it, it is equally distributed and there is an endless supply of it (Apocalyptic notions aside). Any attempt to manage it is futile—time is self-sustaining and it cannot be manipulated, accelerated, paused or reversed by any individual, institution or market (Einstein and string theory aside).
This assertion might seem contrary to the wisdom of Mr. Drucker, but it is in fact what he meant when he penned the above statement for “Know Thy Time”, the second chapter of his 1967 book The Effective Executive. Unfortunately his statement is most often presented outside of its original context (just as I did in the quote above). So let’s alter the quote slightly to more effectively convey his point when presented in such concise terms:
What is scarce is YOUR time and unless YOU manage it, YOU will struggle to manage everything else.
Semantics? Sure, but it illustrates the duality of time: it marks the end of many things for you, yet it has no end itself. It often stops your progression, yet its own progression cannot be stopped. It creates finite constraints for you while enabling infinite potential for all of us. In short, time itself is not scarce; its your investment of time that is scarce. And thus it would be of great benefit to be wise in how you use it.
Let’s assume you’re working full-time and require another twelve hours each day for sleeping, eating and general health needs. That leaves you with roughly 2,300 discretionary hours each year to invest however you desire. Given the U.S. Bureau of Labor statistics estimates median annual earnings for an individual working full-time is $44K+, or roughly $22 per hour, means each year you have an opportunity to invest roughly $50K worth of time. Where you invest is up to you, but unlike money time cannot be banked and saved for later. It continually expires and therefore you make investment decisions every minute of every day.
So how do you evaluate your opportunities? An initial meeting with an investment advisor typically begins with a series of questions designed to find out your desired return and what level of risk you are willing to accept. Along those lines, consider the following investment scenarios:
- You invested $50K in college tuition and after three years have received no visibility to how you have performed—no report card, no grades, no professor comments, nothing. Are you willing to write a check for the fourth year and commit to another $50K for graduate school?
- Over a five year period you invested $50K in a retirement plan that never provided visibility to its financial performance—no quarterly reports, no growth charts, no portfolio tables, nothing. How willing are you to continue giving them a portion of your paycheck? Are you in for another $50K?
- You invested $50K in a new business venture that never reported back to you its revenues or expenses—no cash flow statements, no profit-loss analysis, nothing. Are you interested in investing another $50K in this company?
Odds are none of these investment scenarios are attractive or appealing to you. Understandably, there is an unwillingness to invest in anything that lacks accountability or fails to provide visibility to its performance. And this seems perfectly reasonable. We shouldn’t assume simply attending classes will lead to graduation; and we shouldn’t assume blindly contributing to a 401k will yield enough money for retirement; and we shouldn’t assume a business is profitable simply because it keeps its doors open. To fully benefit from an investment, we need visibility to its performance so we can continually evaluate its return. And if that isn’t possible, we should be hesitant to invest more. Right?
If so, then how are your investments of time performing? Are they paying dividends? How do you know? If you don’t, are you assuming showing up, blindly contributing and keeping your doors open will eventually provide you with a solid return? And if you weren’t willing to accept that level of risk in any of the scenarios above, what is different when it comes to your personal discretionary time?
I argue if you are going to invest significant time in something, make certain you have a mechanism or means to evaluate your return.
If not, then why spend time on it?
