07/24/2018 - Time Value of Decisions

Last time I talked about the time value of money, of which Investopedia.com says: “The time value of money draws from the idea that rational investors prefer to receive money today rather than the same amount of money in the future because of money's potential to grow in value over a given period of time.”[1]

This same concept is true for decisions. Think about it – aren’t decisions (and the consequences that follow) a commodity like money? Just like money, you can spend, save, or squander your time and talents. Just like money, the decisions you make can either compound and create bountiful good for you or they can spiral downward and destroy you. And making good decisions early compounds over time, just like good investments do.

I have watched my children make some hard decisions in their lives. Counter-cultural, sometimes unpopular decisions. I can definitely say that it cost them something to do that – just like setting money aside for investing has an upfront cost. When they stand by the decisions and allow the effects to compound and grow, they begin to see benefit over time. I see maturity and affirmation and strength grow in them. They know, from experience, what they are made of and the next hard decision is a little bit easier.

“Do Hard Things: A Teenage Rebellion Against Low Expectations” by Alex Harris is a great book for considering the time value of decisions. In the book, Alex encourages young people to set high goals for themselves and ‘do hard things.’ This process teaches them about their own strength and potential, as well as making a world-wide impact by the things they actually accomplish when unrestrained by apathy.  Can this ‘rebellion against low expectations’ take place at any age? Of course! Does it have a more dramatic impact when an individual starts young and doesn’t make excuses or accept mediocrity? Of course!

The time value of decisions is significant because making good decisions early can save a young person from the consequences that stupid, regretful decisions have in their lives. I remember in my community a young man who was driving drunk one night, thinking he was having the time of his life. His car drove head-on into another car and, while he escaped with minor injuries, the occupant of the other car was killed. He spent time in jail, paid restitution, and has had a criminal record ever since. But the biggest impact is the life of regret he’s experienced and the fact that he cannot undo what he has done.  Talk about a compounding problem! The trajectory of his life was forever changed in one bad decision. And make no mistake – it was a decision.  He certainly didn’t intend to have a wreck or take a life, but he did pick up the beer and car keys. If you back up from that decision, there were earlier decisions as well.  Friends he chose. Parties he went to. Lies he believed about freedom and ‘fun’.

Whatever your age, it is not too late to begin investing in some good decisions. Take a moment or two to think about the decisions you regularly engage in and the lies you regularly believe. Interrupt your current path and make a good decision for your future.

[1] https://www.investopedia.com/terms/t/timevalueofmoney.asp

Kathi