Time Versus Money Framework

updated 30 Jun 2023

The time-versus-money framework is a way of thinking about how to allocate one's resources, specifically time and money. The basic idea is that time and money are interchangeable, and that by spending more of one, you can free up more of the other. For example, if you have a job that pays well but takes up a lot of your time, you might choose to work less and make less money in order to have more time for other things. On the other hand, if you have a job that doesn't pay well but gives you a lot of free time, you might choose to work more and make more money in order to have more financial security.

Billionaires such as Dharmesh Shah, Naval Ravikant and Balaji Srinivasan are known users of the framework. When they were young they gave themselves a set hourly rate, such as $1000/hr, and if something needed doing, such as returning a blender for $40 for one 1 hour of time, it is simply not worth doing at all, and time should either be redirected at the work that will get them to $1000/hr rate, or on leisure recuperating from the $1000/hr work.

Naval mentioned this in his tweet storm "How to Get Rich Without Getting Lucky"...

"Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it."

Darmesh Shah on the Time vs Money Framework.

Frameworks to Become a Billionaire Time versus Money @ 18 minute