Money Guy Show: How to Buy Back Your Time
Release Date: March 21, 2025
Hosts: Brian Preston and Bo Hanson
Introduction to "Buying Back Your Time"
In the episode titled "How to Buy Back Your Time", Brian Preston and Bo Hanson delve into the intricate relationship between time and money, exploring how strategic financial decisions can effectively allow individuals to reclaim and maximize their valuable time. This concept not only redefines traditional financial planning but also offers listeners actionable insights to enhance their quality of life.
Understanding the Time Value of Money vs. Money Value of Time
The hosts begin by distinguishing between two critical financial concepts:
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Time Value of Money (TVM): This traditional concept posits that money available today is worth more than the same amount in the future due to its potential earning capacity. As Bo Hanson explains, TVM emphasizes that "money today is more desirable than money tomorrow" (02:52).
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Money Value of Time (MVT): Beyond the traditional TVM, Preston and Hanson introduce MVT, which assigns a monetary value to one's time. This perspective recognizes that time itself is a finite and valuable resource that can be strategically managed and invested.
Case Study: Investing Early to Maximize Future Returns
To illustrate the power of investing early, the hosts present a hypothetical scenario involving a 25-year-old earning a gross annual income of $55,000. Assuming a 3% annual wage growth and a 9.5% annualized return on investments, they calculate the substantial impact of consistent savings over time.
Brian Preston highlights a pivotal moment, stating, "If you could just save $100 a month, you could be a millionaire" (04:07). This underscores the exponential growth potential of early and disciplined investing, turning modest monthly savings into substantial retirement funds.
Saving Rates and Discounts on Future Time
A significant portion of the discussion revolves around how saving rates correlate with discounted future time. Bo Hanson simplifies complex financial mathematics by suggesting practical saving strategies:
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For a 25-Year-Old: Saving $272 a month can secure an 80% replacement of pre-retirement income, effectively buying future time at a 98% discount (09:05).
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For Older Individuals: Even those in their 40s and 50s can benefit, obtaining discounts of up to 90% off for 40-year-olds and 61% for 55-year-olds respectively. This emphasizes that "it is never too late to start building" (10:15).
Brian reinforces the feasibility of these strategies, noting, "If you can make that decision, set it and forget it, you then don't have to put any more calories or mental horsepower into what should my savings rate be" (26:38).
Valuing Your Time Today
Transitioning to the present, Preston and Hanson explore the concept of valuing time today. They argue that every moment has a monetary value and cost, which evolves throughout one's life. Bo Hanson shares a personal anecdote: "Time with family was maybe even more important than the goods and stuff" (16:35), highlighting the emotional and relational aspects of time management.
Balancing Financial Goals with Personal Life
The hosts address the challenge of balancing financial aspirations with personal fulfillment. They caution against becoming overly restrictive, which can lead to regret and diminished life satisfaction. Brian poses a thought-provoking question: "Would you give up time with your spouse for financial gains?" (20:07). The answer, they suggest, should be "no", emphasizing the importance of prioritizing meaningful relationships and experiences over mere financial accumulation.
Practical Steps to Maximize Time Value
To empower listeners, Brian and Bo offer actionable steps:
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Know Your Why: Understand the motivations behind financial decisions and how they align with personal values and goals. Brian advises, "Know what makes you happy, what gives you purpose" (27:33).
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Be Intentional: Every financial and time-related decision should be deliberate. Bo Hanson echoes this by stating, "Be very deliberate. You need to be very purposeful" (28:28).
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Incremental Improvements: Start small to avoid feeling overwhelmed. Bo suggests, "How about just start with 1% more. What can it do for you?" (12:46).
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Leverage Resources: Utilize available tools and calculators on moneyguy.com to visualize savings impacts and plan effectively.
Balancing Sacrifices and Enjoyment
Preston and Hanson acknowledge that not all sacrifices are worth making. They encourage listeners to identify non-essential expenses that can be reduced without compromising quality of life. Examples include:
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Cutting Down on Luxuries: Opting for practical choices over status symbols, such as choosing water instead of sugary drinks or limiting impulse purchases on platforms like Amazon.
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Streamlining Subscriptions: Evaluating and possibly reducing the number of streaming services to allocate funds more effectively (24:13).
Bo Hanson emphasizes, "It's so much better to be rich than to look rich" (24:25), reinforcing the idea that financial prudence leads to genuine wealth and happiness.
Conclusion and Access to Resources
In wrapping up, the hosts reiterate the importance of understanding and harnessing the value of time to achieve financial freedom and personal fulfillment. They direct listeners to valuable resources available on their website:
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Money Guy Resources: Tools, calculators, and downloads to assist in financial planning.
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Learn.MoneyGuy.com: Courses like the "Financial Order of Operations", designed to simplify complex financial strategies.
Bo concludes with a motivational note, "Money is only a tool. It's not a goal. So I want you to maximize every moment and there is definitely a better way to do money" (30:53).
Notable Quotes
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Brian Preston:
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Bo Hanson:
Timestamp References
Below are the key timestamps referenced in the summary:
Final Thoughts
Brian Preston and Bo Hanson masterfully navigate the complex interplay between time and money, providing listeners with a framework to "buy back their time" through informed financial decisions. By balancing savings with personal fulfillment, they advocate for a life where financial security and meaningful experiences coexist harmoniously. For those eager to implement these strategies, the Money Guy Show offers a wealth of resources to kickstart the journey toward a more fulfilled and financially confident future.