TIME IS MONEY-Warren Buffett on 1 Skill to Build Your Wealth
Warren Buffett said, “The rich invest in time, the poor invest in money.”
Time is a valuable commodity, and the old adage “time is money” has stood the test of time for good reason.
The definition of “time is money” is that the amount of time you spend on a task or activity is equal to the amount of money you would have earned if you worked for the same amount of time. This concept is based on the idea that time is a finite commodity, meaning it’s limited and valuable. By understanding the value of your time, you can make better decisions about how to spend it.
This could include investing in activities that will yield the highest returns, such as furthering your education or starting a business. It could also mean saying no to activities that don’t align with your goals. Time is an invaluable asset, and the old adage “time is money” is a reminder that it’s essential to use it wisely. By valuing your time and using it to invest in activities that will yield the highest returns, you can maximize your success.
One of the ways an entrepreneur invests in time is by learning to delegate. Delegation is the process of assigning responsibility for a task or activity to someone else, such as an employee or contractor and entrusting them with the authority to complete the task. It is an important management skill that allows a leader to efficiently manage their time and resources.
Time is Money: How I Learned to Make My Business Grow
As soon as I could afford it, I hired Fede. After a few years in business, I was having a hard time keeping up with my business and my life. So I hired Fede to run errands, do grocery shopping—essentially anything and everything that took me away from my core business.
I could trust her implicitly. I gave her my credit cards, a key to my house, and anything else she needed to make my life run more efficiently. She was amazing, but I soon realized I had a few things to learn about delegation.
I gave her a grocery list and when she returned with the “wrong” brands, sizes, and types, I realized I was falling down on my job of communicating. “No, not this one,” I said, taking out one of the jars. “The one with red and yellow on the label. You know, it has big letters right here.”
We both started laughing because we instantly recognized my mistake. I could not expect her to know these things. And my vague descriptions after the fact did nothing to remedy the problem of a whole bag of groceries sitting on my dining room table that I didn’t really want. It was an “aha” moment for me. I realized how much detail needs to be communicated just to make a simple grocery run. Fortunately, my delegation skills have improved over time.
7 Reasons Delegation is Important
Entrepreneurs are often reluctant to delegate, but here are 7 reasons you need to value it and learn to do it well.
1. I believe most things in life are learned, but learning takes time. Is learning to do the task a better use of your time or learning to delegate? In 10 years, do you want to be doing that task? Tasks are quickly outdated. An important task today may not even exist in five years. Knowing how to delegate will always be a valued skill.
2. You cannot be an expert in everything. Every minute you spend on a non-related task is a minute you are not spending on being your best in your chosen field and becoming a recognized expert in your own right.
3. Your entrepreneurial enterprise will never grow beyond you unless you learn to delegate and delegate well. You have something to offer the world and more people can benefit if you learn to delegate. There is only so much a “one-man show” can accomplish. Your enterprise will grow in direct proportion to the amount of time and money you can afford to spend on delegation.
4. The more money you make, the more you should delegate. In the start-up phase, there is precious little you can delegate. You will probably be doing everything yourself, which is why startups are so tough. Think of delegation as a funnel whose bottom tip starts where you are now. As you grow “up,” the funnel gets wider and wider. More and more people and tasks are filling that funnel pushing out more and more. The goal is a highly productive “funnel.”
5. Start now to think about this important question: What tasks can only be done by you and what tasks can be done by someone else? Over time, the answer changes. You will not always be accurate in your answer. But mental exercise should be started immediately and practiced constantly.
6. If you have experienced poor results due to delegation, don’t blame the practice, blame the practitioner. That would be you….and me. Value the practice and give practice to the practitioner. Even delegating grocery shopping can be a lesson.
7. And finally, alwaysvalue time over money. It is an essential characteristic of an entrepreneur and of the wealthy. On Shark Tank, Mark Cuban always discusses “Time Profit” in his negotiations. The more successful you become, the more valuable will be your time.
Time is Money: Your Ascent to Success & Wealth
During your “ascent to success,” you will have to learn to make constant trade-offs between time and money. You will have to learn to carefully manage both resources. It is sometimes hard to switch from the “trade-off” mentality to “time is always more valuable.” But as your income increases, you must make the switch.
When positive people speak of “no limits,” I understand their intention of wanting to rise high, accomplish anything, and take on the world. I applaud the outlook, but in fact, life is full of limits. And it’s learning to live with those limits that often make the difference between success and failure.
Time is one of those limits. It is finite. You will never have more of it. Delegate often and well for maximum success and wealth.
Time is Money: 4 Ways to Delegate Well to Build More Time and Wealth
1. Pay by the Job, not the Hour. Paying by the hour rewards the wrong thing. What difference does it make to you how long it takes someone to do the job? You just want it done well and on deadline. The better they are, the faster they will go. Why punish someone for that?
Admittedly, some tasks do not lend themselves to “job” rates. I was recently doing some hiring on Upwork and noticed when I selected to pay “by the job” I got contractors who resisted. They said they were not comfortable with that option. When I inquired further, one said he had had people in the past who asked for a zillion modifications to a bidded job at a bidded price, trying to circumvent paying for all the modifications. That is the wrong use of a good system.
What Are You Paying For?
I paid Fede hourly because I trusted her not to waste time and the tasks varied constantly in difficulty and time. So, I chose the hourly method. But typically, you should reluctantly pay by the hour; preferably pay by the job.
When you hire someone, you are primarily paying for an intangible: their expertise or, as in Fede’s case, her trustworthiness. You are hiring someone secondarily for their time. So pay for what you want: an outcome, not a set of hours on a task. Paying by the job rewards the right thing.
2. Always Give a Timeline. “Woz” (the other ½ of Apple’s foundation) still speaks of being amazed by completing a task assigned to him in the early days by Steve Jobs. “Woz” (officially known as Steve Wozniak) thought it was impossible to do what Jobs was asking in the time frame allowed. To “Woz’s” utter amazement (thanks to the insistence and pressure from Jobs), “Woz” brought it in on time. Sometimes having a grand vision to do things in crazy amounts of time can be very motivating.
In defense of this strategy, it is true that tasks often expand to fill the time allotted. But it is also true that requiring too much of someone in too short a period of time can build resentment. (Remember “Woz” and Jobs already had a good working relationship.)
You Want It When?
I first saw the comic at a print shop I frequented. The cartoon character was holding his belly rolling on the floor laughing. The caption underneath said, “You want it when?” Besides the cartoon sign was another one that read, “You can have it right or you can have it quick.”
There is some truth to this line of thinking too. More than once I have allowed “whatever time it takes” to get it right. Not every job requires this and sometimes it is my own perfectionism that drives this rather than the actual need. I readily admit that. (I am getting better, really! ;-))
A Good Strategy
A good strategy to circumvent making a timeline too long or too short for the “delegatee” is to build the timeline together. You will refine this art of setting deadlines but start there. You will get better and better at setting timelines that are both reasonable and challenging but always have one.
3. Decide if You are Delegating Outcome, Method or Both
“Start with the End in Mind.” This strategy was made famous by Stephen Covey. In delegation, it is important to communicate explicitly the outcome you are after.
Decide if the method to get to that outcome matters to you (or if it is somehow central to the outcome). If it is, you will need to communicate the method AND the outcome. If not, leave the method/process to the person to whom you are delegating. General Patton (who should know something about leadership) said, “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”
Method, Outcome, or Both?
I have found that leaving the method to people only belongs to pros and people who have worked with me for a while. For newbies, not communicating the method often creates more anxiety and performance pressure that is needed. Ease their mind and explain exactly what you expect in all facets of the job.
4. Inspect What You Expect. This is one of the most recognized axioms of delegation. “Follow through” is needed from both you and the person you hired. Inspecting what you expect does two things: 1) It gives people feedback along the way–a valuable time saver.
This allows correction to take place when adjustments are still minor. Most importantly, it allows the “delegatees” to know if they are on target with your expectations.
The Second Value
Secondly, this practice establishes accountability. It is just human nature to let go of what we know we can let go. If people you hire know they will be held accountable, they will be more inclined to deliver. But if someone knows that you do not “inspect” what you expect, don’t be surprised if the job goes on and on and the outcomes are never delivered. Clearly communicate expectations and outcomes and then hold everyone accountable (including yourself).
Time is Money: To Delegate Well, Do These 4 Things:
- Pay by the Job, not the Hour
- Always Give a Timeline
- Decide if You are Delegating Outcome, Method or Both
- Inspect What You Expect
In the process, you will develop leadership, communication, and time management skills—just like Jobs, “Woz,” and Patton.
And, like Warren Buffett, you will realize that “The rich invest in time, the poor invest in money.” Time is money and if you learn to delegate well, you can have both time and money.