The Blog of Author Tim Ferriss - Latest Comments in Lifestyle Investing: “Compound Time” Like Compound Interest?

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Jeff — Wed, 04 Mar 2009 00:11:52 -0000

Much of what our society depends on is the fact that time can be compounded infinitely. I think what Tim is suggesting is that we take ownership of the system and manage it for improving out lives.

There's plenty of green(er) grass for everyone to enjoy. Just as soon as outsourcing to India took off more people adept at compounding their own time popped up, in other words entrepreneurs and managers.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Ethan Bloch — Sat, 13 Dec 2008 05:48:45 -0000

This is an extremely interesting and compelling idea about how time can compound. It conceptually makes perfect sense to me and in fact I've thought about time in this way many of times (no pun intended) without realizing what I was doing.

I think the new book on Buffett ("The Snowball") is a great illustration of compounding ones time.

Cheers.

Ethan

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Leszek Cyfer — Tue, 09 Dec 2008 07:52:04 -0000

To sum it up as shortly and succintly as possible:

_Do what will ease your future workload._

- Eliminate, Streamline and Delegate routine, repeating tasks.

- Consider your target, define ideal Abilities and Qualities of a person that have reached that target, and concentrate on acquiring them.

- Repeat

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Heffer — Mon, 21 Jul 2008 20:40:38 -0000

I love the responses people put up. This idea on compounding time is one I understand, but can't completely articulate it. Its like an upward spiral with one good thing leading to another.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Another Chris — Mon, 21 Jul 2008 12:35:43 -0000

I think the first Chris' post is interesting, and I don't see how it contradicts the original post. In fact they work well together.

By hiring a cheaper janitor and going to law school, you are essentially making a risky investment, and just like a monetary investment, (if your boss finds out) it can fall out from under you and leave you with losses.

The "sharpening your saw" (as Drew pointed out) practises that Chris goes on to define; experimenting, collaborating, etc. can be viewed as longer term, safe investments that still add value to your future and your time. You just have to be mindful of how you invest your time in the same way you have to be mindful of how you invest your money.

Great post Tim, thanks a lot!

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

krishnarocks2 — Tue, 15 Jul 2008 21:31:09 -0000

time as a compound interest item sounds....interesting. You still do not create more time. 24hrs. of your personal life is still 24.hrs. weather sleeping, eating, working, etc. its a law like gravity
from donald trump on down time is measured in the same exact way.

However VALUE of that time a variable and compounding can take place. Doug in his 4hww book makes like 3,000 hr. Tim might make 5,000 hr.Donald is 100,000/hr.

Doug gains thousands of dollars and extra time by making his vendor company SPEND hours filling his orders, and yahoo collect his money. He thus has entreprenualized (moving a commodity from one level to a higher level). However, the law of action and reaction states there must be a reaction to this action...but where? Doug's vending company is not happy because they have been de-entreprenualized (a commodity has been moved from a higher level to a lower level). Doug has dumped hours of work from his plate onto theirs....they only way for the vendor company can reverse this action - reaction is to make a second action - reaction. Doug dumps all these hours of work on them..reaction call Doug and tell him to get his butt over to their shipping dock and start filling his own orders with no help from them.

Donald has a MUCH BIGGER PLATE of work hours compared to dougs one company, donald has 100 companies....so this huge plate of spagetthi like hours of work is desiminated among 100 companies and 10,000 employees.
Donald is entreprenualized Boko insane amount of hours of work. but fortunatly its not being dumped on doug's one vending company..they would explode from the sheer influx of Donald hours or one person they would explode too but into tiny peices. so with such a large plate you need many more people...and many more companies to handle the load. many hands make light work.

So yes the VALUE of time can be compounded...however the hours them selves can never be compounded...sorry your watch can only count 24 hours no matter WHO you are.

hugs
kris

not proofreading this because i think i got a mental hernia from thinking and writing and realized i should have shifted this work to a higher level by
outsourcing it :)

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

drew larsen — Thu, 12 Jun 2008 10:01:23 -0000

i don't know about time, but i've always thought that intelligence and love show compounding effects.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Mike — Tue, 03 Jun 2008 23:33:44 -0000

Hey Tim,

This may have already been covered above -- the comments are extensive -- but I was wondering about your thoughts on timebanking (www.timebanks.org). I think it's an interesting take on time as "money".

Also, in regard to time compounding, perhaps as long as you "feel" that you're compounding time then maybe that's the most important thing -- whether it's inherently possible or not :)

I'm new to the world of the 4HWW and Tim Ferriss, but I appreciate you relating your thoughts, even when I don't agree with them! Thanks!

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Mathias — Fri, 30 May 2008 10:48:28 -0000

Very smart post. I agree with the author of the email. I am an entrepreneur myself and the best way of building a company is by outsorucing it to the right people. I usually hire a Project Manager and then I am free to start a new project. And with the money coming from the first project I can reinvest in a new company etc etc.

The more time I have the more I do fitness excercise (love to excercise). It also gives me time to hang around blogs like this one and let my intellect work a little bit as well. The more time you have, the more you can do. You can do more quality things.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Working Nomad — Tue, 27 May 2008 07:00:39 -0000

I was always taught at business school that time was indeed money!

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

cjminvest — Sun, 25 May 2008 09:48:18 -0000

I made some of these simple changes in my company, The Housing Market, LLC. and I was amazed at how much more productive our agents were!! Fantastic. Wish I had started this years ago.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Dereque — Thu, 22 May 2008 16:59:29 -0000

I (like a few of the people below) consider this idea to be flawed in some ways, though the advice that it leads to is quite reasonable and basically obvious.

The key to compound interest (regarding money) is the way that the principle grows exponentially. At a 11 percent interest rate, your initial principle doubles in a little less than 7 years, and quadruples in a little less than 14 years, and will have multiplied by 8 within about 20 years.

The process the author is talking about does not seem to me to be exponential. Firstly we would need something to measure and a verifiable "interest rate" but more importantly we'd have to prove that the effect was exponential rather than simply one of addition.

Aside from this there's the more obvious problem that time is much different than money. For one thing time has a much more finite upper limit (called your life expectancy). Money is a medium of exchange, time is a medium through which we live and beyond practicing a healthy lifestyle we don't have ways to exponentially increase our "time". We can increase our "free time" or "networking time" but again I'd argue this won't be exponential since at best we can move from 8 hrs to 16 hrs each day, and then it ends -- no more compounding.

One can always invest in oneself and it definitely pays to start as early as possible, do the most effective things, and to put as much time in as possible (to a point). This advice is quite useful and obvious and doesn't require the author's (faulty) line of reasoning.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

DT — Tue, 20 May 2008 03:15:28 -0000

Amazing post as usual and with so few words. I am still looking for your book here in Asia, in particular Singapore. It is no where to be found.

Perhaps we are missing something here in the hot house that is Asia.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Wayne Martin — Sat, 17 May 2008 17:19:44 -0000

Gates VP (above) obviously gets a thrill out of the programming he did to automate support and save time. I'd be bored to death doing that.

So my question is this: Is it time we're talking about here, or experience?

Time isn't quite concrete enough to compound, as several posters have pointed out. Compounding experience, though, seems very tangible.

Mini-retirements speak to the need for higher quality experiences. Do you want to learn German vocabulary and syntax and pronunciation, or do you want to know what it's like, if only for awhile, to experience the world as Germans experience it?

An experience that enriches your life and puts a smile on your face long after that time has passed has compounded in value.

Time to go on a tangent: Tim: you mentioned somewhere about wanting to achieve a full splits in six months, or something like that.

Suggestion: take ballet classes for six months.

Reason: It's not the range of motion in the hips that matters. It's the stability and strength and control through the range of motion of the supporting joints above and below the hips that matters.

Here's to years of injury-free training!

Wayne

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

John Haydon — Sat, 17 May 2008 08:22:13 -0000

Very interesting idea! However, David leaves out the spiritual dimension, or what Buddhism refers to as "life-condition". Basically, the idea is that by energizing your life at the core, you are able to use more wisdom and gain a compound interest on your time.

For example, if you eat right and exercise, you will not be effective if you are arrogant, egotistic or self-hating. Buddhism enables you to cleans your life of spiritual impurities, thus adding more "wattage" to the present moment.

See: http://www.sgi-usa.org/budd...

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

MARIA Dontsis — Fri, 16 May 2008 19:11:14 -0000

Hello to all and please HELP! What is it about Tim's site for speed reading - PXMETHOD. I've been trying to get the product for so long and I'm not even sure it is real now....And the site is in TIM's STYLE - no contact info available :)

Please help - I always wanted to master speed reading but none of the methods worked 100%. I was positive that TIM's WILL WORK but it's nowhere to be found....
Any info will be greatly appreciated - please email me directly to madontsis
@msn.com.......

###

Hi Maria,

Please be sure to see the notice on the order page itself -- the PX Method is not shipping. The page is just intended as a sample template for people to use for testing their own products.

Apologies for any confusion. Be sure to see the instructions for tripling reading speed in the "Low-Information Diet" chapter of 4HWW.

All the best,

Tim

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

sam davis — Fri, 16 May 2008 07:38:22 -0000

This is a long string of posts and I haven't read them all so I may be repeating what somebody else said already.

Yes time can be invested and compounded. It's being done already in every type of multi-level marketing business in the world. I personally am familiar with Amway but any other multi-level marketing business uses the same principle. You invest time to help people in your organization get started in their own business. You make money when they make money. Since they are running their own business and not yours, they are motivated to get up and do the work for themselves, not necessarily for you. They build their organization and as it grows, their income grows and thus your income grows. As their organization grows, it becomes self perpetuating and thus you don't have to be as actively involved in it as in the beginning which frees up your time. Let's say the group has 200 people in it. 200 people who each have their own dreams and goals and are working toward the accomplishment of it for their own purpose takes all of the pressure off of you. They do the work. They build their own business and in effect, build yours. If you normally invest 8 hours a week in your business and everybody in your group is investing 8 hours a week, that's now 1600 hours a week being invested into your business. I was in Amway for several years. This was the basis of most of their work. And it made sense to me.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Arjan Haring — Fri, 16 May 2008 03:02:22 -0000

Hi Tim,

Your comments don't seem to work, so that's why you get this comment on the wrong post:

I love warren buffet, how he uses metaphors is awesome.

Metaphors are one of the topics next to storytelling that will be completely hot again in 2009 (again). Happiness will be the subject of 2008, or come to think of it, Meaning. Check my Thoughts on Happiness symposium. Next years theme will be the Moral of the Story. About the science of morality and the art of storytelling.

Would you like to join me at one of the Thoughts on Happiness symposiums?

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Priyo — Fri, 16 May 2008 02:08:58 -0000

I like this topic, mostly I read about tim's book a couple a times to get the point. right now I'm optimizing what I've read and enjoy my free time...

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

olgs — Wed, 14 May 2008 11:28:39 -0000

@Daniel....

thanks so much...i really appreciate you taking time to read my comment. i find your advice inspiring and everyday i am working towards this goal. i guess it is a bit of a culture shock when you come back to a different mentality. in this months 'outside' magazine anderson cooper talks about his experiences and how he has adjusted to experiencing the world around him in all sorts of ways and how he adapts to each circumstance. i read your blog...cool stuff man...i lived in australia for a couple of months. didn't make it down to brisbane....would love to talk more....about your experiences in the adventure of life.

cheers!

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Daniel — Wed, 14 May 2008 03:40:03 -0000

@olgs - I love your thinking!
To me, the ultimate is living a life of purpose and passion. 4HWW is a step beyond being slaves to the relentless pursuit of meaningless more, and a novel way of experiencing a sea change/ downshift while enhance quality of life by leveraging our optimum value creation... but just working less is a vehicle, not a destination.

To me, structure your lifestyle to support your purpose.
4HWW concepts and strategies can help you live better... but if you don't know your purpose, you'll just be enjoying distracting yourself.

In contrast we need look no further than Tim himself - he's not just a lazy BJJ-fighting Tango dancer: Au contrare, he's using his lifestyle and position to impact the world and magnify his impact... his lifestyle allows hiim to fulfill his purpose.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Alex Birch — Wed, 14 May 2008 01:30:12 -0000

Just remember than many of the investments do have maximal returns at certain points. E.g., if you usually network with people around your age, when you're 70 many people in your network will be dead. I guess with money that'd be the equivalent of the death tax.

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Steve Munroe — Tue, 13 May 2008 21:33:48 -0000

While I think the post brings up some interesting possibilities, it appears to me to be based on the false premise that time can be compounded. It cannot. For each of us time is fixed (we just don’t know how much of it we’ve got). But what is possible is to telescope the amount of time we spend on work-related tasks to free up the (fixed) amount of time we have for other things. Such task-time telescoping allows us to engage in more important/worthy activities thereby increasing the value of that time, however we cannot say that time itself increases or grows as a consequence.

The question then becomes this: How do we define high-value time, and how can we get more of it? If this question is important to us (and I’m guessing it is), then it is down to us to do two things: define the word ‘value’ as used here, and then set about finding ways to obtain more of it. Creating a definition of high-value time is of course very personal - mine is bound to differ from yours - but it is also the rationale for why you would bother pursuing an answer to the second question - how to get more of it? Unfortunately many people obsessively seek productivity gains as an end in themselves. Indeed, many productivity exponents (Tim excluded :-) )are great at telling us how to be more efficient or effective in what we do, but not so great at answering why we would care!

It seems apparent to me though, that unless you have defined what high-value time means for you, there is little point in pursuing productivity gains or four hour work weeks. Making it clear to yourself beforehand what high-value time actually means for you, helps to make it clear why you are pursuing greater effectiveness and efficiency at work, as well as giving purpose and momentum to the exercise.

Here are some reasons why I try to telescope task-time:

* To free up time for learning new skills
* To free up time for new experiences
* To free up time to think
* To give me time to produce or improve objects and services of value to others
* To free up time for nurturing relationships with loved ones
* To free up time to enjoy physical activities
* To free up time for laughter and silliness

All of these things (and more) fit within my definition of high-value time, and provide me with all the reasons I need to think hard about how to do things more effectively and efficiently. In fact you could say they’re the basis of my very own - and very personal - lifestyle economics. What are yours?

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

olgs — Tue, 13 May 2008 13:58:50 -0000

hola tim and everyone,

i have a question that is on the opposite side of the spectrum. time is money and is valuable. we spend our whole lives trying to find the balance and truly appreciate this concept. thankfully now, we have actual accounts that its possible and the forum to discuss achieving this dream - 4HWW :) . what if though, you already have experienced the value of time... through such things as backpacking around the world. what if you understand this already prior to being swallowed up by the underpaid and overworked life of the 40hr robot.... however circumstances have brought you into that world again. how does one re-acclimatise themselves in this world or do you ever? - where life supposedly begins on friday night and ends on sunday night... karl said that life at the top may be isolating...however knowing the secret of time and living where others don't fully understand it yet is isolating too...even if you're not a millionaire -- yet :)

comments and ideas would be great...i would love to hear similar experiences or guidance...

abrazos!!

Re: Lifestyle Investing: “Compound Time” Like Compound Interest?

Chris Wilson — Tue, 13 May 2008 02:02:49 -0000

Time is to be spent and invested wisely. This is the most precious of resources, and the good news is that you get lots of it for nothing when you start out. A standard problem with young people is the desire to live in the moment. This is nothing new. However, the key to getting to the good life is balancing how much time you spend on the moment and how much time you spend on the future, and it is truly a balance. He who spends all his time thinking about today is doomed when tomorrow comes around. Conversely, he who spends all his time worrying about tomorrow misses life entirely. Here's a good rule of thumb. Assuming you sleep 8 hours a night, you have 16 hours left. Spend 12 on the future and 4 on today - roughly a 3 to 1 ratio. Presumably, your job counts as time spent on the future (at least it should). If you work 8-10 hours a day, you still need to spend a few hours on the future. That leaves a solid chunk of time to just play, and you need that.

Time invested in the future could be anything from working out (your health is your future), reading (gaining knowledge for the future), engaging in artistic endeavors (your emotional outlets are tied to your mental health and sometimes to your financial future), and working on projects of all types. Your "in the moment" time is your release. Party. Have fun. Socialize. It's okay to spend time doing things that seemingly have no long-term value, for many of them often end up having long-term value after all. For example, I have always been a social kind of person. I like to go out get my swerve on as much as anyone, and through that I've met all of the people with whom I have close relationships today (family excluded, of course). Furthermore, I've learned a lot about my fellow man by interacting on a regular basis, which leads me to the next point.

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