Is One Year of Your Life Worth $25 Million?

\"WhatTime is certainly precious. Everything we do, everything we enjoy, every moment we cherish, uses time. With enough time, it seems anything is possible. With too little, nothing is. And once it runs out completely, your game is over.

And running out is exactly what it’s doing – this incredibly valuable asset is steadily, relentlessly slipping away. We can’t do anything to stop it, but that reinforces how much we should value, and make the most of, the limited time we have left.

Ironically, while we know time is extremely valuable, you can’t really assign it a price. Like all of the most important things in life (family, friends, good health), time’s value isn’t easily translated into financial terms. The approaches that can be used to value assets (how much it costs, market pricing, how much income it produces) don’t seem to apply; intangible time doesn’t fit into any of those models.

Or does it…

One of my most beloved entrepreneurs, Felix Dennis, had a profound quote on the value of time in his book How to Get Rich (you can read a scintillating review by my favorite personal finance blogger here).

He said:

“Could you turn the clock back for me by forty years, I would willingly swap you every penny and every possession I own in return. And I would have the better of the bargain, too!”

He wrote this in 2006, at the age of 59. He was worth, at the time, approximately $1 billion.

You’ll note he didn’t say, “but I get to keep some seed capital to start over again” or “I need you to include a university education or some current technological know-how” (both of which he lacked) or “I need a guarantee of health and a long life”.

No, his proposed transaction was quite simple: roll back 40 years on his odometer for everything he owns. He’d go from a billionaire 59 year old to a penniless 19 year old, and he’d think he got the better of the deal. That’s a pretty bold statement, and I’m sure it brings many of us to wonder if we’d be willing to do the same.

Hypothetical Market Price – A Way to Value Anything

But Felix has done something much more than just give us an interesting question to ponder. He has also shown how, by using a hypothetical, we can actually start to give a value to these intangible and hard-to-value assets like time. Even though he wouldn’t be able to actually buy back years in a market transaction, his statement gives a hypothetical market price and shows that 40 years are worth at least $1 billion to him.

Are they worth that much to you? Is one year of your life worth $25 million?

Granted, most of us don’t have that much money sitting around to spend on buying back years of our lives. But it’s a great concept to consider, because it shows there is a way to start thinking about the value of some of our less tangible, non-financial assets.

You can use this for any assets or liabilities in your life, and for anything you’d like to acquire. How much would you be willing to pay for something you want, no matter how intangible? At what price would you be willing to sell something truly precious? What are things like youth, health, or a full head of hair worth to you? (Whether you’re a hypothetical buyer or seller will depend on your own situation…)

There Are Two Sides to Every Transaction

The idea of a “market” for time in an interesting one, because we can, in our fanciful hypotheticals, sit on either side of the transaction. It’s interesting to consider if we’d pay $1 billion for 40 years back, or even $25 million for a single year, but most of us don’t and won’t have that kind of money.

But we all have time. With a large chunk of precious time sitting on our personal balance sheets, what if we became sellers?

How much would I (or Felix, perhaps) have to pay you to give up a year of your life? I think many people would sell one year of their life for $25 million. That’s a life-changing amount of money for most folks, and we’d find a way to justify losing all of the magic moments that could have happened in that lost year.

But remember, Felix didn’t want 1 year. He wanted 40.

And that’s where the gut check moment should arrive. Would you be willing to sell 40 years of your life for one billion dollars? I cannot think of anyone who would agree that deal. (I guess a terminally ill person, but he really doesn’t have the 40 years to sell, does he?). While $1 billion is a lot of money, when you think of everything that you’d be giving up in those 40 years (no matter your starting point), you’d have to be crazy to sell them at any price.

But that’s a powerful statement, isn’t it? If you’re not willing to sell for that price, then that means 40 years of your life are worth more to you than $1 billion. And our good friend algebra would say a year of your life is therefore worth more than $25 million (though I know selling a single year still sounds quite tempting).

It means that every 19 year old is far richer, in a sense, than a 59 year old billionaire. Anyone who is younger than you is richer than you, and you’re richer than any of your elders. It’s an interesting concept, and it reinforces that everything of value we can enjoy in this life is only made possible by having the time to do it.

Now That You’re a Billionaire

Pondering >$1 billion of time assets on your personal balance sheet may require a slight adjustment in your thinking. Especially since that incredibly valuable asset is dwindling every day, and you’re trading it for whatever you’ve chosen to do that day. Turning your time into meaningful relationships, great experiences and memories, and a positive impact on your world seems like a pretty fair exchange.

Wasting time on things you won’t even remember tomorrow seems less so. And working seems like a terrible trade – you’re trading hundreds of dollars worth of time for every dollar you make working. Perhaps work is really fun, or done with friends, or helps you make a positive impact on the world, which would of course change the equation. In general, though, if work is just done to earn money, we need to be ruthlessly focused on it as a means to an end.

Because work is necessary – we need money (and can’t sell our time) for lots of things. If I couldn’t buy food, starving to death would seriously impair my “time” asset. If I couldn’t provide a house, or clothes, or medical care for my kids, my relationship and experiences with them would suffer. Making a positive impact on your world is made far easier if the bills are already paid.

But once you have enough money to cover the basics, you need to be very focused on how time is slipping away and what you’re getting in exchange. If you’re slaving away at a job for no good reason, or spending your time on meaningless and unimportant activities, you’re getting absolutely killed on the trade.

How Much Is Today Worth?

There is one final hypothetical that I’d like to leave you with, one that I think about a lot nowadays. I may well be in the best time of my entire life. Though all of the Generation Y and Z and AA kids would say I’m impossibly old in my 40’s, I’m still healthy, I have a wonderful family and friends, and my children, in the golden age of their youth, are a greater source of happiness than I have known or will likely ever know. I suspect there will be a time, many decades from now, when life will be a pale shadow of what it is today.

If I went to a very old me, and asked him how much he’d pay not for 40 years, or a year, but for a single day from my current life, I imagine he’d pay a king’s ransom. It would be worth a fortune to him to come back and enjoy one more day as I’m living right now.

His agenda would seem glorious to him and mundane to me. He’d play with the kids, make them laugh, and give them monster hugs. He’d sit with his wife and have wonderful, meaningful conversations about life, and the family, and all of their happy goals. He’d take the dog for a walk and scratch his head for a long time after to see his smile. He’d get on the phone and talk to all of his still-living family and friends and celebrate their lives and their memories. He probably wouldn’t spend much time surfing the internet.

He’d gladly pay a dear price for that day, so similar to many I enjoy right now, and he would feel he got “the better of the bargain”. That hypothetical price shows the true value of my time, and how he’d spend that day shows the types of things I should be trading for it.

Time is precious, but it’s not priceless. Use your own hypothetical to figure what it’s really worth.

 

Are you going to get $25 million of value out of this year? Will today’s experiences be worth almost $70K of your time? And, most importantly, was reading this article worth over $200 🙂

Picture courtesy of JamesDeMers

 

17 thoughts on “Is One Year of Your Life Worth $25 Million?”

  1. This article was extremely timely given heightened activity at work translating to stress. Time is much too valuable for that.

    Thank you- J

    1. You’re welcome – glad it struck a chord. It’s a tough paradox – work can drift to dominate most of our time and all of our mental focus, but (barring some folks much better than me, who are truly doing something to save the world) will probably be one of the least important things we’ve done in hindsight.

      Thanks very much for the comment

  2. I love this piece. In particular, I agree that while selling a single year may be tempting you’d be an idiot to trade away 40 years at any price. And the point at the end about spending a single day really drives home the point that all of our years are made up of days. Most people just don’t really appreciate what it is that they have in the moment they have it.

    It’s like working out. When I was in the best shape of my life I thought I wasn’t strong enough and was looking forward to that next benchmark of strength. Now, I look back and think, “Man, I was strong back then.” Appreciate what you have when you have it. Thanks for the reminder 🙂

    1. Thanks for the note, and I totally agree with you. We need to appreciate everything we have when we have it.

      Borrowing on your strength example, I used to love doing “blastoff” with my eldest son (throwing him in the air and catching him). A couple of years back I started doing it with my youngest son, and my eldest felt nostalgic so we gave it a try. I could (barely) blast him off, but he weighed enough where catching (arguably the most important part of the maneuver), hurt him a bit under the arms. We kinda both agreed it wasn’t a great idea to keep doing it, but it was a little sad that something we had loved had passed without us even knowing it.

      At least I recognize the ticking clock with his little brother – his astronaut career is coming to a close, but we’re making hay while the sun shines!

  3. Thank you for this! I am currently on pins and needles waiting to hear if my best friend has cancer and this helped in grounding me. Live today.

  4. Just want to point out that there is a different value between the marginal year being sold v. the average sell price of a year. I would sell one year for $25Mil, but I would have a tough time selling a second year for less than say $60Mil, and a third year might not be worth it at any price. The older you are the more a marginal year is worth on both the buying and selling side of the transaction.

    1. Absolutely. I tried to tease that a little without getting all micro-econ on everyone, but that is the important point. I imagine many people would sell a year for $25 million, but I hope no one would sell a second year no matter the price (though we know some would…). The 40 year, billion dollar deal is useful because I can’t conceive anyone taking that deal, so somewhere along that path everyone hit the point (marginal cost > average proceeds / year) you reference.

      I haven’t thought through your final point fully – you’ve given me another hypothetical to think about! But unless there are medical breakthroughs improving my quality of life, I imagine a 90 year old me wouldn’t pay much for one year, and would be happy to sell one pretty cheap. It does bring up a good question: what are the most valuable years of your life?

      Thanks for the note

  5. That Mr. Dennis was willing to trade all of his wealth for 40 years also tells me he had great confidence in his ability to make good, financially, all over again. He must have perceived his wealth as the product of hard work, persistence, and prudent entrepreneurship, not good fortune. There’s a useful moral there for all of us who might desire more financial success.

    1. That’s it exactly. He was relentless, outworked everyone else, and kept 100% ownership. He felt that youth was the greatest asset anyone could have, and talked at length of the advantages that came with it. The “young, penniless, and inexperienced” have nothing to lose (so can swing for the fences), don’t know that something can’t be done, and have the stamina to outwork anyone older. Combine that with his only desperate fear – working for someone else – and you have the formula for a successful entrepreneur. Expertise had little to do with his model, because he simply found and hired it.

      Thanks for the note.

  6. Business Insider picked up your blog post. That’s what brought me here.

    The last section …How Much Is Today Worth?… made me think of my deceased family members. I passed it along to all my friends and relatives. Thanks for this.

    1. Thank you for the note and for sharing. I have a family member whose life is a pale shadow of what it once was, and it’s a daily reminder that what seems mundane right now will someday seem glorious.

  7. Paul,

    Beautifully written piece and the topic is priceless. (Get it!) All joking aside, I do have one question. Would Felix Dennis give up his entire fortune for 40 years back on his life with his current wisdom and knowledge as a 19 year old, or would he only have his same 19 year old memories and know how. I say this because, as they say “youth is wasted on the young,” so not having the appreciation of what it means to be old would give you the same naivety all over again. Thus you would still not appreciate your precious time. I am curious if the value would change, but I guess maybe only Felix could answer this. Keep up the great work!

    Sincerely,
    RV

    1. Thanks very much for the note. I think you’ve hit the key issue – while Felix always had an incredibly strong entrepreneurial streak, he did gain some valuable wisdom after age 19 (but still early in his career) which paved his path to riches. Having that wisdom was probably key, in his mind, to being able to replicate his success. Thanks again

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