TRANSCRIPT:
Hey this is MJ DeMarco and I’d like to officially announce, I’m back!
It’s been nearly TEN years since I’ve actually did an in-person video and a lot has changed besides the gray hair and wrinkles. As you might know, one of the big changes for me, is I left Phoenix Arizona now live in Alpine Utah which is a little town about 40 minute SE of Salt Lake City. Now a lot of people asked me “why?” especially since I hate snow and lived in Arizona for nearly 25 years and pretty much, loved living there.
Unfortunately the “why” I would move to a place that is subject to snow and blizzards is another video, but since we’re on the topic of SNOW, it is a good segue into this video’s topic: What am I about to say, if you accept it, will be a major paradigm shift in your life. And if you don’t accept it, well I have bad news: I don’t need you to believe me because TIME will make you a believer. TIME will teach you the lesson. And by the time that TIME teaches you the lesson, it will be too late.
So when I was at college earning a finance degree, one concept was repeatedly drilled home: Money today is better than money tomorrow. This concept, the discounted time value of money, is universally taught worldwide, no matter the university. The concept is simple: Given a choice, you always prefer X dollars NOW over X dollars LATER. One million dollars today is light-years better than one million dollars fifty years from now. If you ever played the lottery, you’ll recognize this phenomenon: the winner doesn’t get the $10M prize immediately but over 30 years. If they want all of the money now, they’ll only receive about half.
When time is involved, future money is discounted by an arbitrary interest rate. For example, one million dollars received fifty years from now and discounted at a mere five percent interest is worth only $87,000 in today’s money. Folks, that doesn’t even buy you a top of the line Ford F150. If there was any evidence proving that TIME is a horrific partner for wealth, look no further than the prior statement.
So here’s the big paradigm shift: When it comes to time itself, a more valuable resource than money since you can’t make more if, and you’ll never be as young as you are today, TIME enjoys no such discounting. No school teaches what I call The Discounted Time Principle which I discuss in my latest book,The Great Rat Race Escape . The Discounted Time Principle states that future “elderly” time is not as valuable as today’s youthful time. Think of it this way. If a genie granted you a ten years of total of financial freedom, would you want it at thirty years old? Or at seventy? Isn’t freedom better while you’re young and vibrant and not in life’s twilight when health and energy might be precarious?”
So let’s get back to me moving to place that gets a lot of snow. I’m about 45 minutes away from one the best skiing capitals in the world Park City Utah. So when people heard that I was moving to the area, the first question they asked was, “Oh, do you ski?” And the answer is, unfortunately NO. And here’s the thing … if I wanted to learn how to ski at my age, I’m not sure I could. I’ve had multiple orthopedic surgeries, from shoulders to elbows, I have no cartilage in my ankles, and have bad knees from playing years of pickup basketball, and basically, me learning how to ski at my age is not the same as me learning to ski at age 30. You see TIME makes my free time less valuable as I get older and older, simply because time ravishes your body and the things you could enjoy at age 30 are not the same things you can enjoy at age 70.
So whenever some rat race media outlet or one of these “financial experts” is preaching about financial freedom if you just start saving now while waiting 30 or 40 years, be warned. You’re getting brainwashed and numbed into believing freedom at twenty-five is exactly the same as freedom at seventy-five. I’m mean think about that insanity. Mainstream financial experts want you to penny pinch every dollar and deprive yourself of life experiences in your youth, so one day you might finally enjoy those life experiences old. It’s a freaking mind-F*ck, and people drink this shit up like a pina colada on the beach.
This fact is something you’ll never learn in business school. If universities taught the discounted time value of time like they did money, Wall Street’s “live poor die rich” financial orthodoxy wouldn’t survive. Entire industries and economies would go bankrupt because the rats would finally figure out that their time is too valuable for trading. Yes, youth isn’t wasted on youth. It’s wasted on cultural norms that normalize and then celebrate the “exchange of youthful time for elderly time.”
My friend, whenever you’re on Instagram and one of those cute “financial freedom” graphs show up on your feed saying after X years X saved per month will be worth with X dollars, run the other way. TIME is a NOT to be used as a variable for wealth, because TIME is wealth. One belief that needs to be swapped is a resource reconfiguration: Time first, money second. You can always earn more money, but you can’t make more time. Using TIME for wealth is like your selling body parts for money … at some point, you’ll have no body left to enjoy your millions.
Now a great book that expands on this is Die with Zero by Bill Perkins. I don’t agree with everything in this book, but it has some fascinating perspectives on this philosophy and frankly, I think he does a better job at explain the Discounted Time Value principle.
Now that said, I definitely will try to learn how to ski, I’m not on to make excuses for not trying, but I don’t hold myself to any expectation. For more resources including the books mentioned in this video, check out the description below. Hope you learned something today, until next time, I’m MJ DeMarco!!
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