Is Interest the Price of Time?

Time is precious, whether it exists or not, it is a measurement we use daily to manage our lives. Managing your money is really about managing your time. What is the highest and best use of your time? In 'The Price of Time' by Edward Chancellor, he posits that interest rates are the 'fundamental pricing gauge that ripples through all aspects of the market' and that interest rates are time, or "the Price of Time". Interest rates are a big part of our time management.

He echoes what we teach in our course - cash flow can be spent, saved, or used to repay debt. What stood out to me was the idea that interest is also time.

Lower interest rates accelerate time.

He's saying is that any goal you have, 'spend, save or repay' is accelerated by lower interest rates, meaning things take less time. You want to spend money now to buy a house, and lower rates make that happen faster. You want to save for the future, and lower rates make it easier for companies to borrow (and make a profit) so their profit grows faster, if you want to repay debt, lower interest makes that easier as the friction to repay is lower.

Higher interest rates decelerate time.

He's saying that any goal you have, 'spend, save or repay' is decelerated by higher interest rates, meaning things take more time. You want to spend money now to buy a house, but higher rates make that happen slowly. You want to save for the future, and higher rates make it harder for companies to borrow (and make a profit) so their profit grows slower, and if you want to repay debt, higher interest makes that difficult as the friction to repay is higher.

Those who control interest rates control time, and therefore 'interest is the price of time' and a reason that those who lower rates tend to stay in power for longer, and those associated with higher rates tend to be dethroned by those who promise to accelerate time by keeping rates lower for longer.

TIP: Consider this for yourself, when rates go up and down how does it impact your financial goals? And at what stage? Lower rates are much better for those before retirement, but those in retirement like higher rates because their houses are paid for (or mortgages are fixed) and they like higher returns on low-risk cash/investments.

a BORROW SMART CONCEPT
The Only Failure Is the Failure to Engage

I had someone is our coaching group tell me they ‘accidentally’ got hooked up with a CPA firm in their local community and they wanted to know what to talk about. There are many ways we discussed how to engage that CPA for new business, BUT the simple answer is: ‘you are human, they are human, just go eat lunch together and ask questions.’

If you’ve never called on a CPA before, pick up the phone right now and call the first one that you find in a local Google search — and ask them to lunch.

Right now is right. There is no right and wrong, only right and left. Take action, push yourself out to the boundary of your current known world… all great things happen at the edge of your known.

NOW is the sweet spot for marketing to CPAs, enrolled agents, bookkeepers, and anyone in the normal tax and tax advice cycles. Accounting professionals are one of the three legs of the Financial Advisory stool.

Please email me after your lunch with a local CPA and tell me what happened, I’d love to hear about it. I’ll send you a free copy of my book and share feedback on your conversation.

Afraid to make the call? Watch this video: 

LIABILITIES and DEBT
What’s Happening.

REAL ESTATE
What’s Happening?

ASSETS and INCOME
What’s Happening?

ON BEING HUMAN
What’s Worth Sharing?

“Most people live, whether physically, intellectually or morally, in a very restricted circle of their potential being. They make use of a very small portion of their possible consciousness, and of their soul’s resources in general, much like a man who, out of his whole bodily organism, should get into a habit of using and moving only his little finger. Great emergencies and crises show us how much greater our vital resources are than we had supposed.”
​— William James ​

DOPAMEMES
And Other Happy Moments…

Understand that what you see in the world now is being fed to you based on your beliefs, making your current beliefs more rock solid than ever. We have to become aware of this and watch very carefully what we share with our minds as it is a powerful computer and we don’t believe what we see, we see what we believe.

Artificial Intelligence
And the Future of Work…

Save time figuring out what and how to cook!
https://www.mrcook.app/en

Homescore - interesting:
https://app.homescore.co/register

Borrow Smart University || National Institute of Financial Education