The Time Value of Time
Have you ever noticed how time seems to go by faster and faster as the years roll on? The lazy summers that used to last forever when you were 10 years old now seem to pass by in a blink of an eye. No sooner have you gotten the garage cleaned out and your spring planting done than it seems like it‘s time to put up the storm windows and get ready for winter.
You‘re not alone. In fact, this sense that time‘s pace is accelerating seems to be a universal element in the human condition.
For years, I‘ve been fascinated by this phenomenon and its implications for what I do: help companies and individuals plan for the future, specifically for retirement. I believe this speeding up of the passage of time explains a lot about what most experts consider to be individuals’ “irrational” or “uneducated” decisions in planning (or not planning) for retirement. Not only does the phenomenon I call it the time value of time and its consequence explain why these decisions are made, but the concept itself can be used as a tool to help individuals with their financial planning.
No Time Like the Present
To understand the time value of time, we must first answer two questions: How fast do we feel like time is passing (I‘ll call this “perceived” time)? How can that speed be measured?