Blog | Entrepreneurship

Time Is Not On Your Side

The difference between the rich and poor when it comes to the their mindset around time

I’ve always been a big fan of Maslow’s Hierarchy of Needs. According to Maslow, all human beings start with the basic physiological needs—that is “needs” to survive, such as food, water, clothing, and shelter. From there, things ladder up to safety, love and belonging, esteem, and finally, self-actualization.

For Maslow, self-actualization was becoming the best of your potential, to be what you could be. Many of us long for those, though few achieve it. And you could argue that those who reach the level of self-actualization are constantly creating new areas of achievement.

The fact is that the most successful people in the world are those who excel at living at the level of self-actualization. But there is a key to achieving this level of need that may not be readily apparent—it is, literally, making time.

Creating time to succeed

If you’ve ever had the nagging feeling that you weren’t living up to your full potential, you’ve felt the tug of self-actualization. For most people, that’s where it stops, at the tug. After all, we’re all very good at making excuses as to why something we long to accomplish is impractical or impossible to accomplish. Sure, it sounds nice in theory, but who’s got the time?

If you think about it, if there’s one thing extremely successful people seem to have, it’s lots of time. You may have asked this at one time, “How do they get so much done?” It seems like successful people have an unnatural ability to do more than the average person.

You may be tempted to think this is because of a harder work ethic, or because they put in the hours. And while that can be true for a few, the reality is that most successful people understand the value of time—and of creating by delegating tasks that suck time up.

Saving time is a waste of money?

When I was growing up, I always admired rich people who could hire maids and butlers to do their housework for them.

My poor dad felt that at best it was a waste of money to hire people who could do the work you could do yourself. At worst, he felt that it was showing off your wealth.

My rich dad, on the other hand, had no problem hiring people to help him do menial tasks. “Your most important asset is time,” said rich dad. “The difference between a poor person and a rich person is how they use their time—and what they’re willing to pay for when it comes to time.” Plus, he knew that by hiring people to help him cook, clean, and do chores around the house, he was helping them feed their own families.

My poor dad always did his own menial tasks and would never dream of hiring someone to do them for him. But he also complained that there was never enough time to do all the things he wanted to do. For some reason, he never saw the connection.

My rich dad, on the other hand, often paid people to do time-consuming tasks for him, and seemed to have unlimited time to accomplish great things like building his business and growing his investments. He understood that his time was valuable and that a small investment in a house cleaner and cook afforded him the opportunity to do high-value tasks with his time that only he could do.

This is, of course, the principle upon which every successful entrepreneur operates: hire employees to do specialized tasks so that the business owner can focus his or her time on building and growing the business. Many rich people are rich because they understand this concept and apply it both to business and to life.

How entrepreneurs and employees view time differently

One of the fundamental differences between an employee and an entrepreneur is that the employee sells time while the entrepreneur sells value. Because of this, the employee always lives in a world of scarcity. The entrepreneur, on the other hand, lives in a world of abundance.

As humans, we only have so much time and energy. Because an employee sells time, that is they get a paycheck for the hours they put into a job, they can only work as much as there is time in a day and energy to work. Eventually, they have to eat and sleep. If they’re a balanced person, they have to spend time with family and friends, and maybe pursue a hobby or two. Yet, even if they did nothing but work, they could still only produce 24-hour’s worth of value in each day.

Entrepreneurs sell value. So, they can transcend time and energy. Rather than sell their time, they invest it into building systems that run and create value with little to no effort on the part of the entrepreneur.

So, for instance, an employee can make a great burger but an entrepreneur makes a system that makes millions of great burgers. That is the fundamental business model of McDonald’s. Or as another example, a web developer creates code, but the entrepreneur creates the business that sells products through that website 24/7. The web developer channels all his or her energy into an 8 or 10-hour day. The business owner channels the energy of thousands of consumers into his or her site at all times. That is much more powerful, and it is how true wealth is built.

This points out a fundamental truth: employees and entrepreneurs have different mindsets that shape the way they see the world. And these mindsets color everything when it comes to interacting with the world, from how they interact with their kids to how they make purchasing decisions.

How employees view buying things

Bringing this into true clarity is a feature that Ally bank launched in partnership with Amazon’s Alexa in 2017, which will tell you how many hours you have to work to purchase something.

As “ Business Insider” reported, a typical exchange might go like this:

User: “Alexa, open Ally and tell me how much a $1,000 bike will cost in CurrenSee?”

Alexa: “Okay. How much do you make in a year?”

User: “$75,000.”

Alexa: “Thanks. How many hours do you work in a week?”

User: “40 hours.”

Alexa: “Okay a $1,000 bike will cost you 27.73 hours of work.”

The was built to help people be more financially disciplined and decide if something they really want is worth the time cost. This makes sense because, as I’ve pointed out, the only thing employees have to sell is time—and it’s a very scarce resource.

I find this to be a very depressing way to view life. As Einstein pointed out, time is relative. Confining your ability to pursue your dreams by the constraints of time is a reductionist way of viewing life. It is a limiting mindset that serves to tamp down possibility rather than opening it up. Yet, sadly, many people live this way, and features like this will only serve to reinforce the employee mindset.

How the rich view buying things

The rich do not view the world in terms of time value. Rather, they view the world in terms of cash flow. A rich person would never ask Alexa how many hours they’d need to work in order to afford something—and not just because they already have the money.

For instance, many years ago I wanted a new Bentley. I had the cash on hand to easily pay for the car, but I didn’t want to do that for a fun toy. Kim and I discussed it, and we decided to use it as a motivation to increase our investments by finding a cash-flowing asset that would pay for the car with passive income. It took six months to find the right asset, but in the end, I got both my car and an asset that put money in my pocket each month well beyond when the car was paid off.

This is an example of a worldview of abundance. Rather than compare my limited resources to my purchasing ability, I created more resources and increased my purchasing ability.

The difference between the purchasing mindset of an employee and an entrepreneur is summed up neatly by the different words my poor dad and my rich dad used.

My poor dad always said, “I can’t afford that.”

My rich dad always said, “How can I afford that?”

Live below your means?

Ultimately, what I’m talking about here is the scam advice so many so-called financial advisors give: Live below your means.

It’s not surprising to me that Ally Bank, which profits off of people with low financial education saving money, would create an app that helps them reinforce the live below your means mindset. After all, they’d much rather have you keep your money in the bank so that they can lend it out at a 10 to 1 rate while paying you next to nothing in interest. Having employees live below their means is always in the bank’s interest.

Creating time = creating happiness

There is another upside to this approach to changing your mindset on time to be like that of the rich and entrepreneurs: happiness. It’s often said that money can’t buy you happiness, and while that may be true, what money can buy you can make you happy.

As Harvard Business School reports, “New research finds that we’d all be much happier and healthier campers if we eased up on the cooking, scrubbing, and grocery shopping and instead threw a little money at these problems.”

Professor Ashley V. Whileans, who helped conduct the study, points out that many people have no problem saving “for vacations, personal experiences, going out for nice meals, and health care,” but don’t seem to feel free to save up and pay for services that would free up time.

Yet, according to her study, after receiving $40 to spend over a weekend on either a material item like a bottle of wine or on time-saving purchases, “people reported that spending money on time-saving purchases left them in a better mood than spending money on material goods.”

And when you’re in a better mood, you’re more predisposed to do your best work on things you care about—like build that side business. Ideas flow, productivity increases, and barriers are broken.

It’s time to create more time

Are you fighting that nagging feeling that you could be doing more? Do you feel like you never have enough time for anything and it’s making you miserable? Do the things you want in life come down to a calculation of your time value and it frustrates you?

Don’t push those feelings away!

Instead, I encourage you to contend with them and take a look at how you can invest in creating more time to focus on the passions and goals you have for yourself. Rather than look at a housekeeper as an expense, view it as an investment so that you can achieve your goals and dreams. The key, of course, is to use your free time to do something constructive that moves you toward self-actualization, not just sit on the couch and binge-watch Netflix.

Rather than live below your means, I encourage you to determine how you can increase your means. Don’t be constrained by time. Rather, find out how you can move beyond time to create near-infinite returns through business and investing.

Today, start thinking like the rich when it comes to your time…and just maybe you’ll be rich in no time.