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More Money or More Time?

More Money or More Time?

| May 01, 2019

More Money or More Time?

LFG Marketing | May 2019


Surveys show that in the United States, almost everyone, even those with very high incomes, believes their lives would be better if they had more money. But maybe what we really need is more time.

Americans Work More Than Anyone Else (And Some of the Richest Work the Most)

Among developed nations, Americans have a unique affinity for work. According to the UN’s International Labor Organization, “Americans work 137 more hours per year than Japanese workers, 260 more hours per year than British workers, and 499 more hours per year than French workers.”

Why do Americans work so much? Some attribute it to deficient social policy. Americans have to work more because they don’t have the job security or economic safety nets enjoyed by workers in other countries. Japanese corporations are known for lifetime employment, and many western European governments provide generous benefits and entitlements.

That’s an intriguing conclusion. But here’s one statistic that refutes it: Unlike almost any other country, the people working the most hours in America are those with the highest incomes. To be more specific, it is college-educated married men who are working more than anyone else. Derek Thompson, in a February 2019 article in The Atlantic, summarizes this curious cultural twist:

In 1980, the highest-earning men actually worked fewer hours per week than middle-class and low-income men…By 2005, the richest 10 percent of married men had the longest average workweek. In that same time, college-educated men reduced their leisure time more than any other group. Today, it is fair to say that elite American men have transformed themselves into the world’s premier workaholics, toiling longer hours than both poorer men in the U.S. and rich men in similarly rich countries.

This shift defies economic logic—and economic history. The rich have always worked less than the poor, because they could afford to…Today’s rich American men can afford vastly more downtime. But they have used their wealth to buy the strangest of prizes: more work!

And more work, even with more money, is not a path to contentment. In a February 2019 paper titled “Time for Happiness,” Ashley Whillans, a behavioral science researcher, reported:

We consistently find that people who are willing to give up money to gain more free time – by say, working fewer hours or paying to outsource disliked tasks – experience more fulfilling social relationships, more satisfying careers, and overall, live happier lives.

Drawing from a survey of 2.5 million Americans, Whillans found that “a preponderance of evidence shows that the feeling of having enough time – ‘time affluence’ – is now at a record low in the United States. The situation is so severe it could even be described as a ‘famine’ – a collective cultural failure to effectively manage our most precious resource, time.

Time Poverty: Is It a Planning Problem?

The primary cause of time poverty for high-earners, according to Whillans, is a curious mix of wealth and financial insecurity. Commodity theory is an economic concept which says that when any resource is considered valuable, it is also perceived as being scarce. Applied to the time-vs-money issue, the more someone gets paid for work, the more they value it, and the more intensely they fear losing it. Someone who feels unsure about their finances, especially someone with a high income, is more likely to prioritize working more – to have more money – at the expense of having more time. This condition of earning a lot but never being sure if it is enough, makes us reluctant to work less, or to pay someone else to do some of the work for us.

Yet studies repeatedly show that people who value their time enough to buy more of it, whether through labor-saving

devices or paying for outside assistance, are happier, healthier, tend to socialize more, and end up building more-rewarding careers.

If we believe in the benefits of buying time, one of the best ways to ensure that we do it is to plan for it. We may think we want our free time to be spontaneous and open-ended, but research suggests that planned free time – an exercise class at the same time each week, a vacation that’s on the calendar, a regular date night – actually makes us happier. In a similar way, a deliberate decision to buy time, like contracting a yard service to mow the lawn, delivers a bigger benefit than an impulse purchase.

The time poverty issue also suggests an unbalanced emphasis on retirement. Whillans calls it “future time slack”: we don’t value our time today because we believe we will have plenty of it in the future – when we retire. When a future retirement is our only financial objective, we may not ever learn to value time, or be comfortable buying it. Many retirees suffer from a “spending gap”; they have money but won’t spend it.

A segment of the financial services industry is beginning to address the time poverty issue. You see commercials where a father uses savings to install a swimming pool for his family, an

architect starts her own firm, or a father takes a consulting job to spend less time traveling – all with the assistance of a financial professional. These are examples of money buying time – before retirement.

Lifetime Financial Growth, LLC is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 244 Blvd of the Allies, Pittsburgh, PA 15222 (412) 391-6700. PAS is an indirect, wholly-owned subsidiary of Guardian. This firm is not an affiliate or subsidiary of PAS. 2019-78967 EXP 4/2021

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