Broker Check

Buying Time!

August 16, 2023

What if we could?  What would that look like?  How much would a minute cost? 

Although we cannot officially “buy time” As you probably know there is a very important relationship between time and money.  We have joked for years that most of us would prefer for their money and time to run out on the same day.  That is impossible to plan, however we can begin to make a few assumptions that may get us in the ballpark.

Last time we took a look at the accumulation phase of our financial lives.  Time and money working during that phase focuses on building, growing and compounding returns over time.  When we move into the preservation stage of our financial lives the time and money relationship changes.  We now become concerned with our money going to zero before the clock strikes for the final time. 

In the preservation stage, each month that our bills get paid and the value of our investments remain level, we win!  Sure we would like to see some growth over time as well, but living within our means preserves the time and money.

To use an analogy that I observed as a child.  In our growing years, we are about adding chickens to the flock.  This increased egg production and the potential for more chicken dinners.  In our preservation years, it’s all about consistent egg production.  This means culling some birds on occasion and replacing them with a better egg producer.  Another issue, in my Grandpa’s brooder house we had predators that were stealing the eggs, namely, rats.  The rats had to go so the egg production could be maximized.  Ok, have I taken this too far?  I trust you get the idea. 

Inflation has that potential to erode our purchasing power so we need to add a few “egg” producers and keep the “rats” at bay so our portfolio can keep pace, or another option is to change our lifestyle.  There is a lot to think about in the preservation stage of our financial lives. 

As time keeps marching some of these issues become less important because of our life expectancy.  At this point we become comfortable with the fact that our money will outlive our time.  This realization leads to the third phase of our financial journey, the legacy or distribution stage.  More on that next time!

Navigating the phases of our financial journey can be a bit intimidating, especially the transition from one stage to the next.  Our Advisors understand these phases and the emotions often connected with the transitions.