Do You Know Your MVT?

by Gopi Nair
February 18th 2021

When studying Finance 101, we are taught the Time Value of Money (TVM). It simply says one dollar today and one dollar tomorrow are not even exchanges. One dollar tomorrow will be more valuable as it can earn an interest for the time it was parted with.

   

I am going to talk about the Money Value of Time (MVT)! Every hour you spend on worthless pursuits will cost you money. For example if you are earning 200000 Dollars a year your one hour is worth 100 Dollars. (50 weeks x40 hrs per week=2000 hrs X 100 =$200000). If you have the ability to earn that extra 100 dollars for the hour you waste , you are losing money or losing income.

   

If you enjoy cutting the grass or moving the snow it is a different matter. But if you spend two hours to remove the snow, and if you could employ someone to do it for 50 dollars , you are ahead of the financial game. But I will not employ the MVT , if I am baby sitting or even doing chores around the house. It is a prudent thing to be aware of one's MVT, especially surfing the internet and overly indulging in social media wandering. Even reading a book, or taking an on line course to enhance your skill is a worthwhile pursuit.

   

Know your MVT!

   

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