It's About Time

Time Out of Mind is simply a wonderful article. Author Stefan Klein makes a strong and articulate argument against the notion that "time is money".

"Believing time is money to lose, we perceive our shortage of time as stressful. Thus, our fight-or-flight instinct is engaged, and the regions of the brain we use to calmly and sensibly plan our time get switched off. We become fidgety, erratic and rash.

Tasks take longer. We make mistakes — which take still more time to iron out. Who among us has not been locked out of an apartment or lost a wallet when in a great hurry? The perceived lack of time becomes real: We are not stressed because we have no time, but rather, we have no time because we are stressed."

After taking a couple of economics courses, you invariably come to realize that the "cost" in opportunity cost is in fact stress. Applying the "no free lunch" principle makes perfect sense when you're making a calculated decision on which alternative might be best for the growth of your business. But does it realistically apply when you're calculating your free time in terms of dollars? "My free time is worth _______." Its really not, because its free! It only costs as much as you think it does. Hence the stress.

Quick elaboration. Suppose you get paid $10/hour and all your overtime is pre-approved. Now you have to valuate every extra hour beyond 8 hours as being worth $10, otherwise you lose it. Therefore, any activity you might choose to do outside of your work time has to be worth more than $10 to you. But what if you take a break because you're tired? Or go grab a sandwich? Or just do nothing? Some might say that these activities make you more productive and energetic allowing you to work more hours later. That's one possible rationalization. But is it even necessary?

The moment you choose to pursue an activity outside of work, your acceptance of the cost is intrinsic in your choice. Borrowing from economics once again, that cost is sunk. If you decide to focus on it, you only end up causing yourself stress above and beyond the $10 you already decided are worth losing. So then, would it be appropriate to say that opportunity cost is in the mind of the perceiver?