I wanted to share this interesting article about “time discounting” written by Robert M. Sapolsky in the Wall Street Journal. I have discussed the “time value of money” before, but what about the “time value of time”? This article is based around the idea that when people discount time, they may also discount the future consequences of their actions. It discusses research suggesting that how children treat time when they are young is a good indicator of how they will make decisions as adults. Children who only value how quickly their decisions can yield any positive result, instead of weighing in the overall consequences and benefits of their decisions, are more likely to commit a crime or present anti-social behaviors.
It makes perfect sense. Those who are able to think through and understand the long-term consequence of their actions are far more likely to avoid mistakes and unwanted results. For example, I was trying to lose a few pounds a while back, and my banker got me a box of See’s Candies. I knew that eating those chocolates would thwart some of my progress, both physically and mentally (once you have one, you have to have another!), but I ate two of them anyways. Darn it! Those with more disciplined about their diet — meaning, those who take the time to analyze their actions not just now, but in the future, too — will surely drop weight faster than me. I chose to “discount time” by valuing those delicious chocolates now, and putting off my healthy eating until after. So many of us do the same thing with saving and investing. Putting money away for the future is not always fun or easy to do, but it sure is necessary. It’s hard to think about what you’ll need in 10, 20, or even 30 years, but the earlier you start, the better. If you are able to understand that time will positively affect this choice, you are more likely to show patience and pick the option that will help you in the long run.
Sometimes this has been a struggle to get this truth across to my four kids. Some of them get it, some of them don’t, and they all apply it at all different levels. Even with the same parents, the same upbringing, and the same talks about money, they are all different people with their own personalities.
I hope you enjoy the read — it has some fascinating concepts.