We all have heard “Time is Money” or the financial professional phrase “Time Value of Money.” “Time is Money” suggests that time is a valuable resource, just like money, and should be used wisely. The proverb is often attributed to Benjamin Franklin, who used it in his essay “Advice to a Young Tradesman” in 1748. However, I venture to say that it’s not a proverb but an inverted definition. What do I mean? Just as “a sun is a star” and “a star is a sun”, “Money is Time”. In this essay, we will explore why this is true.

Modern-day humans think of money as government-issued currency or fiat currency. The currency is designed to help facilitate trade (medium of exchange), as a store of value (you can hold it without “losing” value), and as a unit of account (a measurement stick – how much value).  Before the invention of fiat currency, humans used other means to conduct transactions. Typically, non-perishable commodities such as gold and silver were a preferred medium of exchange. However, sometimes, people had to engage in direct barter. Yet, what are people exchanging? In direct barter exchange, the wheat farmer wanted eggs, so he exchanged some wheat for the eggs. Well, not exactly. The farmer spent a certain amount of his time growing wheat; he planted the seeds, took care of the field, and was eventually able to produce the crop. The other farmer acquired the chickens, took care of them, and in return, they laid eggs for him. Both farmers took their most limited resource, time, and used it to produce a good that could be exchanged for another good. The farmers could have also exchanged their goods for an intermediatory like gold, silver, or a fiat currency and then used that intermediatory to exchange for desired goods. It is common for economists to refer to the fiat currency or the commodity used (gold/silver) as a medium of exchange, while the goods traded as what is being exchanged. Although, that, in my humble opinion, is wrong. What is being exchanged is time; the goods are just another medium of exchange. Let’s call them the primary medium of exchange. Once you use your time to produce the good or service, you can directly exchange it for another good or service. But what you are exchanging is your time; when you barter, your goods are just an instrument to acquire someone else’s goods.  Notice you could be producing goods and services that you yourself do not consume; however, if there is demand for them, you can still exchange them. In the same way, you can exchange your goods and services for a more fungible medium such as gold or, even better, a fiat currency. This secondary medium of exchange allows us to trade more easily when we cannot directly barter.

Money just represents the time you can acquire from someone else to mow your lawn, make a car for you, heal you, etc.  The more money you possess, the more time you can acquire from other people. For example, wealthy people can obtain many services and goods they do not have to produce, allowing them to live a leisurely lifestyle (they can spend more of their time however they see fit).

When confronted with the statement “Time is Money”, correcting the misconception is crucial. Time is not money; money is a medium of exchange for time. This distinction is vital as it underscores that time is the ultimate limited resource, and money is merely a tool we use to facilitate acquiring/exchanging time.