COST OF MONEY VS TIME

 COST OF MONEY VS TIME

 
Isn't that a weird headline ?
How do you attach cost to money when money provides for all costs?
How can money be cheap or expensive?
Let's modify it slightly and call it-
" Cost of accessing money"!
Does it make things better?
Still not ? Ok then let's get some scenarios.
Imagine a person starts working in a different city or country and gets his salary check every month. But he does not get time to open a bank account and deposit that cheque.
Another scenario...
A retired person has to go the bank to get his pension only to be informed that the pension has not been deposited yet by the government or his employer.
He also has to provide a once a year Life certificate.
Yet another relevant one...
You work on a ship and receive your monthly salary in USD in cash at the end of the month. You find the remittance cost by your employer to be bit high and the banks ashore do not accept cash for telegraphic transfer.
Another one...
While applying for some exams or US Visa you need to send a bank demand draft of a particular bank which is quite far from your home.
Yet another one...
While going for a business loan by a MSME or a smaller company the charges for processing are deducted.
 
 
All these are examples of accessing cost of money. These are charges which necessarily reduce the net worth for accessing for any product or service or the utility value.
We balk at 2% MDR charges by a seller on credit cards but do not think twice about 20% something that bookmyshow charges for booking a ticket.
Not only all these charges but also the time spent to access that money must be taken into account as opportunity cost.
But how does this affect us  "The Mariners" as investors, consumers and service receivers.
If you start applying first principles think about how much time, fuel and cost of vehicle your spouse or you spend at visiting the bank to withdraw some money, make a bank DD, book a ticket, pay a bill. If you start quantifying your time with money that you earn on board it will make you lose sleep.
But that is what modern financial technology combined with information technology combined with electronic communication has done to the cost of accessing money.
All the above examples were given to make you realise what the scenario was just a decade ago when for various document renewals we had to visit Mumbai.
The cost of travel, stay, lining up outside offices and banks used to take away a third of the precious leave period..
Now imagine the agencies like banks that have brought these Fintech services to you on your mobile , how are they getting paid.
By reducing the cost of mutual funds purchases by almost 150% today how are AMCs still managing to make money for you.
By now you must have got the picture and what I'm intending to drive at.
Your salary coming by every month end into your account is a service that your employer does to you.
If that facility was not provided the results could be disastrous.
Not only you would have to provide money to your family before joining ship, you wouldn't be able to invest it during your stay( this problem still exist with some Indian companies whose ships are plying mostly in foreign waters).
Yes now the cost of accessing money has shifted to a different paradigm now! Mobile and the portable computing.
All these facilities reduce the load on your leave time and provide you with ample opportunity to use it as quality time till learn and do new things and also teach your children - some new things.
This is possible as long as these devices don't become your " devices for destruction of your time ."
I personally have been very cautious and miser with my time .
I always used to quantify my every minute with the salary that I earned and later on became so paranoid that I wouldn't even waste it to make some quick money by dabbling in the stock market. As a result I was able to travel with my small family - far and wide and gain so much in experience.
The effect of this was seen on my daughter's ICSE - history exam. There used to be a question of identifying the picture that was given of a historical monument and some related questions on that.
Her class teacher complained that she is showing off by saying that she had seen the monument. I had to charm the teacher by saying that she had so enthused my daughter that now we actually travel to see these monuments.
Anyway... Back to the cost of money.
Please appreciate, accept and use the modern methods of money handling. Set up systems to efficiently use your cash flows so that you don't have any liabilities and your money can be invested by the 5th of the month.
Don't waste your time in trading or speculation about money, rather use it too acquire newer skills, read news books, get more degrees, develop new hobbies empower your family, raise your children in the true sense.
All this has been made possible because the Speed and Cost of accessing money has gone down leaving you lot of quality time to spare.
Even good roads, highways, efficient cars, cheaper flights... All these have added to reducing the cost of accessing money and services and leaving you time which if used correctly will pay you rich dividends and if missed it will leave you very poor.
Just to share with you even this article has been written on a flight from Mumbai to Dehradun today- reducing the cost of Money by utilising time you see...
 

© Rajeeve Kaushik
10Feb2023