Wednesday, September 25, 2013

Duncan from Koffee? On Point NPR Today (Audio).

We've got a thing for NPR here in New Haven.  And apparently NPR has a thing for us.  "On Point" with Tom Ashbrook's radio show topic today was changing careers, and starting new ones. Changing careers can be tough, but the topic is raised, which I found to be most pertinent:  Does time equal money?

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Music, to someone's ears
Capitalism beckons that question nearly every day. Millions of Americans, as well as people around the world, are paid by the hour. That's to say that life itself has a monetary value; that you can determine what the value of a life is via a math equation, based on what an hour of a person's time is worth.  To quote Benjamin Franklin:

"Remember that TIME is Money. He that can earn Ten Shillings a Day by his Labour, and goes abroad, or sits idle one half of that Day, tho’ he spends but Sixpence during his Diversion or Idleness, ought not to reckon That the only Expence; he has really spent or rather thrown away Five Shillings besides." [source:  Advice to a Young Tradesman, by Ben Franklin]

Duncan makes a solid point when he mentions the difference between being a worker for a business, and being a business owner.  The fundamental difference, he notes, is that when you own a business, you look at money in a different way.  Money, that which affords us the quality of our homes, the transportation necessary to get from place to place, even determinig the amount or style of clothing we can own.  That which determines where one might be able to go to dinner, for example.

(1:45) "The nature of how you make your money changes, because most people when they work, they're essentially exchanging time for money.  And when you own your own business, that whole model, that whole construct, changes, to you are paid by the value you create."

3% is a typical interest rate on a savings account.  Meaning that if you have $1000 in savings, you will be given, by the bank, $30 at the end of the year.  While $30 is not necessarily enough to afford anything, imagine if you had $1,000,000 in the bank, as some people do.  That same 3% interest on the million dollars is $30k, which is twice as much as the minimum wage.  Simply by having a million dollars in the bank affords you to be able to live the life of a person working a full-time job at $15/hr.  The only difference is that 2000 hours of your time, over the course of the year, belongs to you because you don't necessarily have to trade it, as the "money equals time" formula implies.  That time is yours.

You can listen to what might be considered "second-hand reporting" (there's some electric organ music in the background you can hear; admittedly I recorded this on my iPhone while it was on the radio).  Interestingly enough, both Duncan Goodall and Tom Ashbrook are both graduates of local university Yale.  Interesting career, Tom.

"Remember that CREDIT is Money. If a Man lets his Money lie in my Hands after it is due, he gives me the Interest, or so much as I can make of it during that Time. This amounts to a considerable Sum where a Man has good and large Credit, and makes good Use of it."
[source:  Advice to a Young Tradesman, by Ben Franklin]