When I was in my early 20s I would visit Las Vegas, NV often to play poker non-stop for 18 hours in two days. I was a beginner at the game, but I was better than break-even. I was fascinated by the game and would play the game at home ONLINE.
One Las Vegas trip I had an experience at a table that I would always remember. I was at the Luxor Hotel and Casino. There was only one cash game table and I was sitting at the table next to an older gentleman. I jokingly folded my hand and let him win a small hand. He reminded me that this game is not an easy game. He also pointed out to me that, “Remember, that in this game you are trading your time for money. And, if you aren’t winning you are trading your time for LOSING. (laugh).”
I did not appreciate the comment but the comment did not make me mad. The comment made me believe that I was doing something wrong in my life. That I am wasting my time even if I am winning. Could I do something other than poker and “trade my time for more money than what I am making at poker.” Besides, this older gentleman is NOT stupid. He is got to be life experienced and MAYBE he detected something.
Trading Time For Money
In the real world of trading we must give something in return for something. We give something that we believe that is valuable in exchange for something that shows us that what we have is confirmed to be valuable, less valuable, or more valuable if the other side is nice.
In the case of poker above, if we are a winning player, we are giving our time in hopes that we will win money in the end. The money determines how good of a player we are. If we win a lot of money we will look like geniuses. If we win a tiny bit of money we look kind of dumb. However, if we are there for entertainment and we do not care then we do not care.
But, either way, the concept is intriguing. Because the concept itself addresses opportunity cost. Opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen. In another words, if I am at the poker table as a business venture and I make $20 when I can make $30 doing something else then I have an opportunity cost of $10.
When evaluating decisions in life we should consider the opportunity cost of that decision. We should look at alternatives to investing your time into something. The idea when you are young is that you have PLENTY OF TIME. This is not true. You get 24 hours a day just like anyone else. You must use your time wisely.
All of us age and get wiser as time goes on. When I was younger I did not take the concept of trading time for money seriously. As years have passed I take the concept more seriously. Today I would never play poker for money again just because there are better things to do for money. But I would play poker for money AND entertainment. When I evaluate business propositions out there I take into consideration whether I believe I am wasting my time.
I will give you a quick example. Recently I felt the need to have a side hustle or another means of making money other than my job. I looked into
• Rideshare (Uber and Lyft)
• Affiliate Marketing
• Fiverr and Upwork
(As a side note, I think it is just AMAZING how technology has progressed over the last 15 years to the point where it is easy to make a side income other than your job.)
Using the “Trading Time for Money” concept, we should do a brief analysis of whether the four side hustles are worth it.
I know that rideshare, Fiverr, and Upwork are very time intensive. You must put in hours of your time to make money with these side hustles. On top of that you must be an expert at what you do.
Yes. An expert.
Don’t tell me that you do not have to be an expert at driving for Uber and Lyft. I know that if your rating is below 4.5 or that you do not accept 90% of your calls you could be restricted. So, you have to have driving expertise to maintain your side hustle at Uber Lyft.
Trading Little Time For a lot of Money
To be a winner at this concept you must understand what will make you a lot of money in a little bit of time. This could be why you pay attention to get quick rich schemes.
In the example above, we will pass off Youtube as too time intensive. Affiliate Marketing, however, appears to be a business proposition that could help us achieve our goals. With affiliate marketing you can set up a website, encourage traffic, and be on your way to thousands of dollars per month.
There are a lot of people out there who have affiliate marketing websites that make thousands of dollars per month. All you have to do is learn every aspect of how to affiliate market and you should make money.
Now, I know that there are people out there that are advertising Affiliate Marketing get quick rich schemes. But this is not my point.
How to Get Wealthier
Wealthy persons have assets that generate them income consistently. On their balance sheet you will notice things like multiple rental income houses that make them $6,000 a month. They do not have to be affiliate marketers to be rich, but they do have real estate.
To get rich, you have to find a way to make your income producing assets larger. In the example above, I downplayed the idea of Uber and Lyft as a time intensive money making opportunity. But, if I had to, I would drive for Uber and Lyft part-time so that I can pay off my house so that I can have a rental income property.
Getting rich is as simple as that! Really. It is. Pay off your mortgage early by getting a part-time job and rent the property out in your own real estate investment company so that you can start collecting rent checks.
Trading your time for money is such a valuable concept that I learned in life that I cherish it to this day. Some say that it is trading time and effort for money. I prefer to keep it simple.
As you age you will become more sensitive to this concept. You should not take up every money-making opportunity out there and waste your time on all of them. Instead focus on something that you know will help you succeed in life whether the outcome makes you wealthier or healthier.