This is a great saying by Wolfgang Goethe, a German writer and statesman. “Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.” Yes, time is money and money is time. Before you go any deeper into this article, read the 80/20 rule. 80% of what you do, contributes less than 20% of the value of your work. What does this mean? Simple…You are just wasting 80% of the time you are awake, doing things which don’t really add any value to your life. Just take a look at many of our young people, aimlessly walking the streets, playing with their smart phones. It’s what you do in the 20% of the remaining time, that defines your life.
To really understand the value of money, just take a look at some of the decisions you make. You want to buy a car. Should you avail a car loan or buy it from the money you have saved? You want a laptop. Should you buy it with your credit card or postpone the purchase because you can’t afford it, right now? Have you kept aside sufficient money for retirement? All these decisions involve money and time.
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Before this question is answered, you need to understand what is time value of money. Today, if you have a 100 rupee note in your pocket, you can buy 5 chocolates. Will you be able to buy 5 chocolates with 100 rupees say two years from now? Definitely not….
The prices of goods and services rise each year. This is called inflation. Inflation eats up the value of your money. The 100 Rupee note in your pocket, is less valuable as each day passes. What do you understand? The money in your pocket, losses value with time. Time is definitely money.
Now to the question, why you should never waste money. Let’s say you waste 100 rupees buying an item you don’t really need. You could have invested this money and earned an interest of 7% a year on it. Now, you have lost the opportunity to invest and make more money. This money could have helped you buy something you really need.
How would you like a genie helping you grow your money? You have this genie right in front of you. It’s called TIME. You just have to make good use of it. Time gives you the benefit of the power of compounding. Can’t understand the power of compounding? I’ll explain it through a simple story….The story of how a farmer gained a Kingdom by placing grains of rice on a chessboard. A very rich King asked a farmer in his Kingdom, is there anything I can’t give you. If yes, I will give you my Kingdom. The farmer replied….
Give me 1 grain of rice on the first square of a chessboard, 2 grains on the second square, 4 on the third square, 8 on the fourth square and so on, for all 64 squares. Each square would have double the number of grains as the square before. The King was surprised with such a small request. The King sent his servant to fill grains of rice on the chessboard. The servant told the King that the grains of rice required to fill the chessboard, could not be produced in many centuries. The King had no choice but to give up the Kingdom. This is the power of compounding.
Imagine if your money could grow at the same rate using the power of compounding? Yes it can, provided you start investing early in life. Start investing small amounts of money regularly from an early age, say in your 20’s. You could retire…A Millionaire.
Want to bunk classes? Feel there are better things to do like going for a movie….Think again. To have a bright career and do well in life, you need a quality education. Quality education starts at a young age. Can you go to school at 40? Invest in a good education at the Right Time. When you get your First Job, don’t sit down and rest. Learn on the job. Invest in your career at the right time. It’s the engine of your growth.
The secret of good time and money management? Do the right things first. The rest of the things will take care of themselves. Focus on important things. Use your time well. Get things done. Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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