you cannot take time with you

As With Money, You Cannot Take Time With You

My Portfolio of Time Today: Risk vs. Reward


Like money, you cannot take time with you.

When your time is up, there is no more time or money to spend. Since that is the case, we must spend our time now before it is too late. I want to look at the risk vs. reward tradeoff of time, just like we do with our portfolio.

Today, some say, is the only day that matters. Because time seems linear, we can’t change yesterday or tomorrow but can only act now. This is the same as the stock market!

Last time I wrote about the thought experiment where you accept as true your portfolio has all been sold down to cash: do you buy what you presently have? Now, apply the same principle to your day. Sell all your plans today and bring it back to cash: how you spend your money is similar to your asset allocation of time every day.

And the time you spend daily has a risk-reward profile that changes depending on your age, goals, and the peculiarities of your own particular life. Random luck has a lot to do with it. So does grit, though. What is the risk vs. reward profile of the portfolio of time I’m going to spend today?


Let’s look at risk vs. reward and see how it ties into the portfolio of time you will spend today.


The Risk of Today’s Time

Of course, the risk of the time you spend today is opportunity cost. Once you spend this second -poof- it is gone, and you can’t have it back. Whatever you did during that second came at the opportunity of doing anything else during that same second. You can only spend your time once!

What are you spending your time on? It certainly depends on what is important to you right now.

You can spend time or invest it, just like income. But it, too, like income, can only be spent once. How much time you have is restricted; there is a range of probability distributions that describe your mortality date.

Like money, you can’t take time with you. You don’t want to be the youngest person in the graveyard, likely nor the oldest.

How you measure risk changes over time as you choose to spend your work and your free time.


The Reward of Today’s Time

While risk is poorly defined in investing (well, it is market volatility or not depending on accumulation vs de-accumulation), reward seems relatively easy.

It seems as if expected future returns are a good measure of the returns of the time you spend. Why else would you do something unless it was good for you now or good for you later? Even volunteering is good for you!

Of course, nothing comes close to describing the full range of human behavior. I’d rather have a stab at explaining the stochastic movements of interest rate movements than try and describe average or other human behavior. Chaos is present in the market and in human behavior.

But the reward of today’s time is either time or money. Time is money, or as I say, it is not retirement, but a time of life when money is time.


How do you measure risk and reward?

You measure risk and reward differently depending on if you are in accumulation or de-accumulation


Risk and Reward of your Time in Accumulation


In accumulation, in general, you trade your time for money. Therefore, there is little risk early on in life for either time or money. That is, you have the potential to have large amounts of both!

Risk is market volatility, but the irony is that young people don’t need to fear this risk.

Reward means a long life where you have some spending and some saving all through your life. More at some times and less at others. But you want to turn your time into assets which then will give you money that you turn into time during retirement.

Risk is in not accumulating enough assets or not enjoying your life in the process. The reward is getting there; however you do so.


In De-accumulation, you trade money for time. The nest egg you accumulated (your assets you intend to use to pay for retirement) is now used to free you from trading time for money.

Of course, it is not nearly as clean as that; there is overlap on both sides of the spectrum.

But risk becomes the retirement-specific risks, which may be mitigatable or not with money or insurance. So, no market risk. Yes, sequence risk.

And reward? You don’t run out of money, yet you meet your retirement goals and have a grand time doing so. Or at least be as happy as you choose to be given your financial, emotional, and social circumstances.


The point is how risk and reward are measured change as we age. Not only for your finances but also for this fictional scenario when I force you to spend your time anew every day on future assets.


How Goals Affect the Risk vs. Reward of Your Day

As risk and reward changes during your lifetimes, so do your goals.

You have financial and personal goals, spiritual goals, and other “spokes” that are important to your life. These are all things you spend your time on.

I have been spending time thinking about retrospective goals lately. That is when we are 20, we believe a lot will happen in the next ten years, and 29-year-olds report that, yes, a lot has changed over the last decade.

But when you (source, please?) ask 50-year-olds how much they will change in the next decade, they say not much. Yet 59-year-olds report more change in the last decade than in the previous five!

Life throws stones. You dodge. Man plans. God Giggles.

The spokes change over time as you ride through the decades, but you still live life one day at a time and live life as only you can. You have no idea what you will be doing a decade from now (cause stuff changes), and moreover, you don’t even have any idea what will bring you joy a decade from now (source, a Gladwell book?)

If you have good mental health, or rather I should say when your mental health is sufficient for the task at hand of improving your life, you spend your time every day on something. Something might as well be a goal.


Purpose and the Time of My Day

Then, finally, there is the purpose of the day today. Of course, every day doesn’t have a purpose when you begin, and most have none at the end either. But in between come the weeks and then decades. I like that noted author Gerald Diamond says that the 70s are the best decade he has had yet.

He had no idea he wanted to be an author until age 50. Two previous careers brought accolades, but he is best known for his books. Yet, he has so much purpose this decade. Maybe not more than in the last decades, but on topics that he did not even know he had an interest in 20 years before.

And late in life, he had twins and changed his goal to save the environment. If not him in his 70s as a literal 4th act, then who?

You can have more purpose some days than others, but I bet you can put odds in your favor through your daily rituals and habits. When I get some, I’ll let you know if they work.


Conclusion — My Portfolio of Time Today: Risk vs. Reward

We spent some time today looking at your time. How do you spend your day?

The time you spend has a risk vs. reward profile that changes based on your purpose and goals, from accumulation to de-accumulation.

I like to say when you are retired and spending it all down: transform time is money into money is time.

“It,” of course, is complicated. It is your nest egg, your accumulated assets remaining to spend.

If I forced you to cash today, would you buy back the same assets you have currently? How about with your time?

What about if I forced you to do that within the next 10 minutes? Or even the next day. Today is all you have. Right now, in fact.

That’s a thought experiment I will try. When I make the time.

Posted in Retirement.