Photo by Julian Jagtenberg on Pexels.com
" data-orig-size="1880,1127" sizes="(max-width: 1880px) 100vw, 1880px" data-image-title="man wearing gray shirt standing on elevated surface" data-orig-file="https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" width="1880" data-medium-file="https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg?w=300" data-permalink="https://smallivy.com/2024/01/27/how-much-is-a-life-worth/pexels-photo-103123/" alt="" height="1127" srcset="https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg 1880w, https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg?w=150&h;=90 150w, https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg?w=300&h;=180 300w, https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg?w=768&h;=460 768w, https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg?w=1024&h;=614 1024w" class="wp-image-24004" data-large-file="https://smallivy.files.wordpress.com/2017/03/pexels-photo-103123.jpeg?w=723" />Photo by Julian Jagtenberg on Pexels.comMoney is time.
Money is just a storage of time that you can use when you wish. When you get a $20, you have in your hand a certificate for someone else’s time. You could have someone cook and serve you dinner, change the oil in your car, or maybe give you a hair cut. You get some of their time in exchange for the $20 you give them. To gain that money in the first place, you probably used some of your time to do something for someone else. When you buy something, you’re just getting the time you spent for someone else back from another person. That person then trades then money you give him to someone else for something he wants, and so on.
To survive, you need to spend a good portion of your time gathering the things you need — food, clothing, shelter, security, warmth, transportation, etc…. You could create a farm or homestead and use your time to make these things for yourself directly in isolation, but most people instead spend their days doing something they’re good at, trading that time for money, and then trading the money for the things they need. You might be selling insurance contracts, but you’re doing it so that you can pay someone else to reshingle your roof.
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Money was created because we’ve learned that it is better to trade time rather than having everyone do everything for themselves. Trading allows each person to specialize and do one thing well rather than needing to do many things poorly due to lack of experience, skills, and proper tools. Money is an IOU that allows you to trade something you make to anyone who wants it, then trade the money to someone who makes what you need.
But things like life-saving surgeries cost money. So do helicopter flights out into the middle of nowhere to rescue a hiker who bit off more than he could chew and now will die in the wilderness if not brought back to safety. We’re often told that lives are worth more than money and it doesn’t matter how much money it will cost, the life needs to be saved? But is this really true? Today we’ll look at time, money, and life and see what a life really is worth.
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Giving and money
People are often more free with their time but tight with their money. They spend many hours doing things like fixing their car or doing home projects to save money. But if you look at the money saved versus hiring a professional, they could have made more money spending the extra time at their job, assuming they could work over as they wished. Working extra can also perhaps lead to a promotion because of the skills you develop and showing that you’re reliable and productive. If you do these home projects because you enjoy them or because you can’t find someone else to do a good enough job, perhaps it is worth your time. But consider carefully before you give up time, because the time spent doing things you are not good at and don’t enjoy is often not worth the money saved.
People also tend to be more giving of their time than their money. You might not give a friend $500 to help hire movers, but you would probably spend a Saturday helping him move. But what is that Saturday worth? You could have spent it making $500 or more, especially if you have a job that lets you work extra hours for pay, or you could have been building or making something for yourself. But most people would probably have just been watching TV or surfing the internet anyway, so spending some time helping a friend out, spending some time together, and perhaps getting help when you need it in the future, are worth the exchange.
People also tend to be more giving with other people’s money. Very few people would give $1M of their own money to get someone else’s child out of a well, unless they had hndreds of millions of dollars, but they are perfectly willing to have “the government” pay to do such a task. Because most of the money used to extract the child comes from other people, abstracted further into “the government” so that you don’t even feel like you’re taking money from people, people are happy to pay “whatever it takes” to save a life.
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Would you trade it all for another year?
If a life is in danger, should money be no issue in trying to save it? Many people say that lives are more important than money. But money is time. This means that when you’re spending money to save one life, you’re taking parts of the lives of other people and expending them to save that life. At some point it no longer becomes worth spending the money. This is obvious when actual lives are lost or traded, like when three people will die if they try to save one other, but when it gets mixed up with money, it becomes less clear. That doesn’t mean that it should be ignored, however.
So, in terms of money, how much is your whole life, or a portion of your life, worth? Before you say that a life is far more valuable than any amount of money, think about this:
If you were going to die in two weeks without a surgery that cost the $1 M that was your life savings, but the surgery would only let you live for one more year, would you do it?
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What the courts say
In trials when someone dies, often the compensatory damages are in the $1-2 M range. In a way this makes sense, given that someone who made the average wage of $50,000 and who worked for 40 years would make $2 M over that time. Through his/her life he/she would have traded a great deal of time for about $2 M, so their heirs should receive about $2 M in compensation for the time that was taken. People aren’t awarded $200 M when someone has died because, even though the loss may be great, it still isn’t worth that much of the time of others.
The truth is, most people waste time
Probably the oddest thing about time is that people tend to value it less than money, at least when it is their money. People will tell you that they would give anything for another day or even another hour, but people spend most days and hours finding ways to make time pass more quickly. People spend their time playing solitaire on $800 smart phones. Before smart phones, they’d play solitaire with real cards or do any number of things that are really just ways to waste time when they could be doing all sorts of productive things. People are always waiting for things, then waiting for those things to end, rather than seizing the moments that they have and putting them to good use.
So maybe next time you find yourself sitting at home with a few hours before you need to go somewhere, maybe read a few chapters of Peter Lynch’s One Up on Wall Street and learn about investing. Or maybe learn how to setup your cash flow to become wealthy instead of staying poor by reading Rich Dad, Poor Dad. Or maybe even pick up a copy of the SmallIvy Book of Investing: Book1: Investing to Grow Wealthy and learn how to use investing to grow your wealth. Think of how much more you could do if you used the time you used it productively instead of wasting it.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.
