What is the Asset You Least Want to Lose?

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Will this be you?

“By the time I have money to burn, my fire will have burnt out.”
–Unknown

I was speaking with a friend recently, and this friend bet that I would become bored in retirement.

“You’ll go start some other company because you have the entrepreneurial fire burning within you,” my friend said (I paraphrase).

“Nope. I’ll be traveling the world. Wanna bet?” was my response.

Yes, I enjoy what I do as a profession. I enjoy entrepreneurship. I like the challenges and the freedom that both pose for me. I like that I have some say in controlling my destiny.

However, that doesn’t mean that working is what I always want to do. I have other interests, like travel and soccer, that, given my druthers, I’d pursue over working.

I suspect that there are few of you who would choose work over family, travel, the dog, your hobbies, etc.

While you want to enjoy your work so that you’re not in 8-12 hours a day of misery and drudgery, it’s not the absolute #1 item on your list of what’s important to you.

Certainly, I could become an angel investor, which might be intellectually rewarding and stimulating and potentially have some upside beyond what the stock market or real estate investing could offer; however, as we discussed in “Once You’ve Won, Stop Playing the Game,”, there are two primary risks in such a pursuit, or entrepreneurship for that matter, that I want to avoid when I’m done.

The first is the financial risk. While I obviously wouldn’t invest more than my at risk capital, there’d be no real purpose in taking such a risk if I will have already retired with the lifestyle that we want to have in retirement.

However, there’s a second risk which is much more intractable.

The MOST Risky Asset Class You Have


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One nugget of “wisdom” I hear about entrepreneurship quite often is that young people should pursue entrepreneurship. They’re young. They (should) have a pretty sere lifestyle from college dormitory life. Their net worth is likely negative, so there’s no very much to risk – although student loans do not go away in bankruptcy. If the entrepreneurial venture does not succeed, no big deal. They’ve lost maybe a year of working in a regular job and they can go back into the workforce and make it up by continuing to live like a deprived college student.

Perceived value of time as we age by Hull Financial Planning, Fort Worth, Texas

The reason that we offer this advice, in truth, is because we think that younger people should value their time less than older people should.

Our perception of the value of time is a function of how much time we are spending to the amount of time that we think we have left on the planet.

Thus, one year to a 23 year old, who, assumedly, has about 60 years left, is about 1.67% of his remaining lifespan.

To a 43 year old, that’s 2.5%.

To a 63 year old, it’s 5%.

Therefore, accordingly, that year is worth 3 times as much to a 63 year old as a 23 year old.

But, is that the way that we should really think about time?

Your time is precious no matter how old you are

At any point in your life, you can make an investment, take a shot, lose the money, and work to get the money back.

You can always make more money. You cannot make up lost time.

For me, the potential hazard of another entrepreneurial venture after I am completely done and ready to retire – having reached PIRE – is not the capital that I would have at risk.

Instead, it’s the time that I would have at risk in getting the venture off the ground or getting it from where it is to where we would want it to be.

Would I get the utmost pleasure out of that time compared to something else I could do?

I do not believe so.

I might change my mind in the future. I might find that I’m not fulfilled, that my top rung of Maslow’s hierarchy is satisfied, and the way to get to that level of fulfillment and satisfaction is through another startup somewhere.

Yet, most of us think of money as our most precious asset rather than our time. Why is that?

As we explored in “Monkey Brain Needs a Watch,” the loss of money lights up pain sensors in our brain, while the loss of time does not trigger such a reaction in our limbic systems.

When we lose time, we shrug our shoulders and say “oh well.” Think of the time when you were supposed to meet someone, waited 30 minutes at the location, called the person, and found out that your meeting was next week at the same time. You might have uttered a “well, shucks” (or some inappropriate variant), but that was probably the level of your anguish at having lost that time in your life.

Yet, imagine if you had a $20 bill in your pocket. You reach into your pocket to pull out your phone to check the time – since we don’t use watches anymore! – and the $20 bill is stuck to the phone and falls out. A stiff breeze gusts up right then and starts to blow it away. How long will you chase that $20 before you decide it’s a lost cause?

If you’re like me, you’ll chase it for a long time.

But, when we think about how we’re spending our future assets, we only think about the money, and we rarely think about the time – be it when we make purchases, decide whether or not to outsource unpleasant parts of our lives, or working longer to make more money.

Thus, my friend who made the bet that I’d likely jump into another startup whenever I declare myself “done” and at PIRE is probably going to lose that bet, not because I am worried about losing my at-risk capital in an unsuccessful venture, but, rather, because I may wind up investing an asset that I can never get back and that has no way to multiply.

My time.

Is there an asset you’d rather lose than your time? How old are you (roughly…since it’s not polite to ask someone their age), and do you think that affects your answer?

Do you ever think about your time when you’re making spending or investing decisions? How do you value it against the other things that you can gain from what you’re spending? Let’s talk about it in the comments below!




About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.

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