Want financial success? Budget time & energy before money!

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In this guest post, R. Srivatsan discusses the importance of time and energy budgeting for financial success! Srivatsan would only like to be referred as a “long time reader” of freefincal. Regulars may recall that he wrote a wonderful guest post on the importance of looking at the earnings power of a stock: It’s Earnings That Count: Forget the next Infy; Can you identify the next Satyam?

Subsequently, he wrote the automated earnings power box stock analysis module found in excel stock analyzer with screener.in data and Morningstar India and Morningstar USA editions, The latter version has the approval of Earnings power box creator Hewitt Heiserman Jr. Srivatsan also discussed the Pros & Cons of Finding Stocks with Earnings Power for Long-Term Profits

Oft overlooked concepts of budgeting

Imagine these two scenarios:

  1. It is Saturday evening at your home. Your family asks you whether everyone can go out for a movie and a dinner.
  2. It is Monday morning at your work. You are already busy. Your boss comes up and asks whether you can take up an additional task.

Above scenarios require a simple yes/no answer.

Though the scenarios seem to be different, they are essentially the same. The decision making variables when reduced to their simplified forms are Energy, Time and Money.

When we say budgeting, everyone is familiar with the financial budgeting – the monthly expense money tracking variety.

How many of us do a Time and Energy budgeting?

Let me digress and come back to this in a moment. You will understand why.

In our quest for tools, tips, tricks and proofs of early retirement, financial freedom and what not, we forget that financial life is an outcome. It is a non-linear combination of your personal life and your professional life. All three are a tangled web.

Personal Life  + Professional Life ⇌ Financial Life

Note the reversible equilibrium equation. Now, why do I say a non-linear combination? Success or failure in the reactants in the LHS has a huge multiplier effect on the product in the RHS of this equilibrium equation and vice versa. Reactants and products all feed off each other; and beware the equilibrium can be disturbed very easily! It needs time, energy and money to make it a stable equilibrium :).

Now, let’s go back to the questions I asked in the beginning.

In personal life, more often than not; it is really a question of time first, energy second vs money. (I want to spend enough time in leisure; I do not feel like cooking at home; I can afford a dinner and a movie; that’s why I earn this $$$$)

At work, if we really think about it, the decision variables are invariably energy first, time second vs money. (Is this an interesting or painful task? Can I afford to spend my time on this? Do I really gain anything out of this?)

{If you are an entrepreneur running a business, all three factors come into play in every decision!}

Offense wins games; Defense wins championships–Not really

It is a well-known NFL cliché but doesn’t work like that in personal finance. Let me explain.

Every personal finance blog worth its salt advises on frugality, minimalist living, and delayed gratification. What I call playing “defense or bowling + fielding” in our personal lives.

On the flip side, winning the ovarian lottery, Trump relaxing H1B visa norms and having a lucrative career surely makes life easier. What I call playing “offense or batting” in our professional lives.

Personal Life (Defense) + Professional Life (offense) ⇌ Financial Life (Championships)

These are like our two eyes. It is always better to have binocular vision than be blind in one eye. Simply playing defense (being frugal) without playing Offense (career development) is not a viable long time solution.

The West Indies cricket teams in the 70s and 80s are still revered because they had this blue print executed to perfection. They had a feared defense (Holding, Marshall, Roberts, and Garner) and an even deadlier offense (Greenidge, Haynes, Lloyd and of course, Richards).

{To those crazy Indian cricket fanatics, that 1983 WC final loss was a “black swan event” :); WI destroyed India (in India) 3-0 in the 1983 test series and IIRC Kapil Dev was sacked from captaincy barely 6 months after lifting the World cup}

Beware of your “time sinks” in your personal life:

Anything that flows through a sink “drains” away. Same applies to time. From a newborn to a dying person, from a beggar to Buffett, everyone has the same “time bank account” – 24 hours. The difference from person A to B is essentially how they save, invest and generate ROI out of their time; hence the cliché “time is money”.

  1. Be honest with yourself and diligently document your time sinks and critically evaluate whether they are warranted. You are the best judge of what is a time sink for you.
  2. This could be “n” number of activities like watching or talking about movies, sports, politics, Facebook, WhatsApp, twitter, even reading crappy, verbose and rambling guest articles like mine J
  3. Put a premium on your time and never compromise. (A good starting point would be the book – Your Money or Your Life by Vicki Robin and Joe Dominguez)

Beware of your “energy sinks” in your professional and personal life:

  1. Be aware “when” and what times of the day you feel energized, creative and can be a superman/woman.
  2. Be aware “what” kind of work energizes you and de-energizes you. Make sure you run your outlook calendar and not the other way around. Have ruthless priorities when it comes to work.
  3. Know “who” the energy sinks in your workplace (and among your friends circle) are. These are the people who make you feel emotionally and mentally drained during the course of work. {If your boss falls in this category, please visit www.naukri.com immediately. If your immediate family falls in this category, contact a therapist immediately.}

Hence, the budgeting success equation boils down to,

Time budget + Energy budget = Financial Budget

Want financial success? Budget time & energy before money!
Venn diagram created with meta-chart.com

Parting thoughts:

Found this outside a pizzeria:

“…We make a lot of dough. But, work is only a slice of our lives; not the entire pizza…”


Over to you

Do you agree with Srivatsan? Do you have any tips for time and enegey management? Share below

Do share if you found this useful

About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of freefincal.com.  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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  1. Th article was a good read. Loved the West Indies cricket team example.

    The placement & frequency of advertisement is, however very distracting. You could find a way the balance the knowledge & moolah……

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