Spending time on things that weren’t going to get me there.
- I worked out how much time I was willing to spend working.
- Next I calculated how much each of those hours was actually worth… based on quantifiable market rates, not some idealistic imaginary number.
- Then I assessed each activity I was investing time on, and either eliminated or outsourced those that cost less than my time value number.
- Finally I began investing in myself to maximise the return I could achieve from each of those working hours I was willing to spend.
I worked out early on that ruthlessly budgeting, shaving 10% on each grocery bill, or avoiding having a meal in a restaurant was never going to provide me with a comfortable retirement. It was a lot of work (i.e. poor use of my precious time) for very limited return on that investment of time.
However devoting my time to activities like acquiring well located cash flow positive rental properties, establishing profit making businesses, or investing in diversified low cost index funds would result in significantly larger return on that investment of my time. These investments should continuously generate dividend/interest/rent/royalty income streams, and with a bit of luck may also increase in value over time.
Every dollar/pound/euro an investment threw off was one I didn’t have to earn through expending my own precious time. The more investments I came to own, the more effort free cash flow was generated, and the less time I had to actually spend working.
That in turn increased the market value of my time even further, allowing me to either work less or focus even more on the things that would make a difference.
In other words the investments were buying back the time I would otherwise need to spend working in a job.
Eventually the investment portfolio generated sufficient cash flow to cover all my outgoings, a happy day indeed.
I did the victory dance, semi-retired, and faced the really big question… if I don’t have to work for a living, what do I do with all that free time?! But that is a topic for another day
Good luck with your post @KiwiandKeweenaw.