10 Money Habits to Win Back Your Life and Time.


By:Tim Denning

Image Credit: Twenty20Stock/AlbertoLopez

A habit is automation. Why couldn’t you use automation to take care of your finances? You can.

Rather than self-help habits to make you a psychological cyclops on steroids, I want to shift your financial thinking.

My goal is to make you think, not become rich. If you learn to think deeply then you’ll become rich without my help.

I’ve spent much of my life in the world of finance. There are people who are always broke and stay broke. They are constantly behind the 8-ball. They never seem to get ahead. When they get an unexpected inheritance, they blow it all within a few months. Then they blame the economy or politics.

Then there are people who are easy-going. They don’t drive a Bentley or spit on their waiter while ordering a Chardonnay and sourdough bread to dip in olive oil. Many of these calm people I met while working in a bank. They have enough money for a simple life. And they have chosen a simple life.

One person is a General Manager. His salary is $600K a year. He drives a 1992 Toyota Camry to work. The guy he parks next to has a brand new Porsche. Mr Porsche Carrera 911 laughs at him. He laughs loudly in his head. The Porsche takes away his life, therefore, robbing him of his time. Camry man values time. Porsche man values status that takes away his time. The contrast between the two is radical.

These are the money habits to win back your time and life.

Notice the casino areas of your life.

Bitcoin is mine.

I sometimes use casino thinking without realizing it. I bet wildly on assets without evidence or the proper research. Or I get a message from an expert in the financial field and blindly follow their advice.

The easiest person to fool is yourself.

Casino thinking is taking stupid risks you know you will regret later. Instead, aim for asymmetric risks. “Asymmetrical risk is the concept of taking a risk that will produce a return that far surpasses the risk taken,” according to Andy Liu

If you’re taking stupid risks in lots of areas of your life then things are going to end badly, eventually.

I apply a banker’s thinking to each area of my life (most of the time). I think carefully about the risk before considering any upside.

Think about an intentional sabbatical.

My flawed thinking used to be work, work, work.

Working equals money, I thought. Not necessarily.

When I work too much the quality of my work is terrible. I start writing nonsense. I forget about the reader. Boredom is my demon. When I get bored with writing, from writing too much, I know I need a sabbatical. A sabbatical is a leave of absence from work. It’s giving yourself permission to get away from money-making, and explore your curiosity.

For some of you, your curiosity and imagination died when you were 16 years old. You haven’t had a wild idea and taken action on it for years. It took me ages to understand making money is simply the habit of exploring your creativity.

When you’re more creative you make more money. Creativity helps you unlock solutions rather than being trapped in problems, like a form of quicksand. A sabbatical reignites your creativity.

Remind yourself daily of your hourly rate.

Each of us has an hourly rate. Knowing what it is helps.

I’ve calculated my hourly rate to be about $200. Cheap I know! This means when I think of time I think of this $200 figure. I am unlikely to do a podcast interview on a boring subject that goes for an hour if I know it will cost me $200.

The thing is, it’s not the $200. It’s the time I gave up to get the $200.

Money can buy you stuff.
Money can buy back your time, too.

When you buy back your time, you buy back your life.

Put aside a percentage.

I take out 20% from every deposit I get to my bank account. I’ve been doing it since 2011. Often, I take out more. But I start with 20%.

This money is put aside to reinvest. I invest it in my learning, and assets that help me buy back my time. This isn’t possible for everyone though. If you have a lot of debt or high expenses then you won’t have the ability to. This is why reducing debt and chopping your expenses down is key.

I used to have high expenses. I had a subscription to any app that would sell me a dream. I bought expensive dinners with people I didn’t like. I drove a Big Man’s Willy (BMW) to impress people walking along the sidewalk eating a $2 hamburger, in the hope they would care. Newsflash: they didn’t.

I’d buy new clothes every few months. I couldn’t wear the same t-shirt twice because I didn’t want people to think I was out of date.

I had to give up people’s opinion of me in order to free myself from the expenses I let them psychologically place on me. When you don’t have anybody to impress, most of your purchases related to material possessions disappear.

Buying a $10,000 car may not seem expensive. When you add up the expenses that purchase creates, think about the time you have to give up to get it. Take into account the depreciation. Work out what would happen if the money was put to productive use. You’ll realize this: it’s not worth it.

Remove toxic habits that stop you from investing.

Proactively explore a new way to make money.

I am thinking about Substack. I have been for a few months. I think I might write a newsletter for people who have read my work for the last seven years. This is an idea I have been exploring proactively. I turned it into a research assignment. The research is publicly available so others can make a similar decision. The point isn’t to join Substack.

The point is to take the time to think about ways you can make a little money in a new field you haven’t tried before. Writing, once, for me, was an experiment. That experiment became a project, and now it’s my life’s work and my legacy. This is the superpower of experiments.

Experiments can add value to your life.

They can become ways to earn a living, too, so you don’t have to work as hard following your boss’s orders and getting kicked around like a rag doll from one corner of your home office to the other.

Practice being good to others (a story + 2 lessons).

This may seem out of alignment. What’s being good to people have to do with money? Let me explain.

I cold-called a prospective customer from a firm I already do business with last week. They answered my call. I said “Hi, it’s Tim..” and before I could finish the sentence they hung up on me.

“That’s weird,” I thought.

I rang again. They answered my call. Then they hung up again, mid-sentence. I sent them a text message and said “Hey, no need to be rude. You never know who the person is on the other side of the phone.” They messaged back and apologized. Now we’re going to catch up for lunch. There is a good chance we will do business going forward.

  • Lesson 1: Don’t get pushed around.
  • Lesson 2: People make mistakes. Give them the chance to redeem themselves. Turn a negative into a positive.

He assumed I was some schmuck. When I showed him who I could be if given the chance, everything changed. You have the same opportunity. Treating people well is a good money habit. Why? You need people to make money.

Where’s the exit door?

Investing your money is fun. Seeing the stocks you buy go up is nice. Buying Bitcoin and seeing a 200% gain is delicious. There’s one problem. Financial times won’t always be good.

A question I ask myself regularly is this: “What happens when everybody is running for the exits?”

You want to have a strategy for these times.

Investing is like a game of musical chairs. When the music stops (a recession), you better be sitting on the comfort of a chair. Otherwise, you’re left standing up with your pants down, holding onto assets that you’re forced to sell at a huge discount to stay afloat, pay your debts, and get out of trouble.

I see it all the time. There are 5–10 year periods of prosperity. Then a recession comes along and wipes out all the people who got too greedy and didn’t think about what happens when everyone is running for the exits to get off the financial equivalent of the Titanic.

When you adopt this habit and apply this thinking, you end up playing things differently. You take profit. You’re fearful when the greed index is at an all-time high. And you’re a tiny bit greedy when everybody is selling their assets and running for safety.

Think about liquid versus illiquid carefully.

Real estate is illiquid. It’s not easy to sell a property when the market is crazy and everybody is doing the same. Cash is liquid. You can use cash easily. I try to have less of my investment portfolio skewed towards illiquid assets. Illiquid assets cause me way too much stress.

Money is supposed to help you be less stressed, not get you into even more stress (this is where the rich go wrong).

So when you invest your money, think about how liquid or illiquid what you’re buying is. In other words, if you had to sell quickly, how easy would it be?

Take care of your greatest money-making asset.

Writer James Altucher says he needs to eat, move and sleep well to earn a living. I agree. Your body and mind is your greatest asset.

If you treat yourself like dirt then your ability to earn a living is impaired. I walk off my problems daily. I practice 60 seconds of mindfulness before giving a speech or facing the gatekeepers at a job interview.

I see eating as energy creation. I say to myself “is what I’m about to eat creating energy or taking it away?” If I need to write a 2000 word article for a publication to earn $200 then I’m not going to eat a Big Mac beforehand.

Junk food takes away your energy. Eating plants enhances your energy.

Explore the downsides of “the rich.”

I like to chat to millionaires, occasionally. Many people are dying to ask them how they got rich. I ask them the opposite. “What are the downsides?”

An even better question is this: “What did you have to give up to be rich?” Having a lot of money for most people is their worst nightmare. They just don’t know it. I wish they did.

I was an asshole with a successful startup and a fat paycheck. It took losing everything to learn the purpose of money: to buy back time.

You don’t want to be rich with possessions. You want to be rich with an abundance of time to spend how you choose. What’s crazy is you can get to that place quicker and easier than you may have imagined when you adopt a few new money habits that shift your thinking.

How you think determines how much money you will make.

What you will do with the money you earn will come down to how you set the game up in your head. Society has messed up our financial thinking.

We’re chasing brand names, brickwalls with a roof, and chunks of metal with four wheels. You win back your life when you think about money in a different way. Money is a measurement of your time.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.