Which is cheaper, going to New World or Pak'nSave? The answer is not that simple.
Time is quite simply money. Priceless hours are lost if you don't know the value of your time - hours that could be used to make more money or focus on your investments.
I got thinking about this at a Department of Conservation hut recently after arriving early and having a few hours to while away. A discussion with other trampers wandered on to why I shop at the local New World, and not drive to Pak'nSave.
The reason is that it "costs" me 45 minutes extra in time to drive to the latter - let alone the extra fuel used for the journey. If I put a dollar value on my time there is no way I'm going to save enough on the grocery bill to justify the trip.
Putting a value on time in this way can be financially valuable. For example, five minutes making lunch can save you $6 at a cafe. That's worth $72 an hour to do.
If you're earning $30 or even $50 an hour then making your lunch can make utter sense. But if you're a $300-an-hour accountant or lawyer, then it makes sense to grab some sushi. It's not going to make you poor.
Some money-making activities aren't worth it. For example, selling something on Trade Me for $10 that takes half an hour of your time probably isn't worth the effort.
There's an element of do-as-I-say-not-as-I-do here because I sometimes waste time selling off the stuff my kids no longer need on Trade Me. The reality is I'd be better off financially to simply give that stuff to the Stanley Bay School garage sale (which incidentally is next Saturday morning) and use the time to write more articles.
The same equation can be used in many ways. Is it worth your while to do DIY repairs on your house, or manage your own investments?
To put a value on your time, the first thing to do is work out how much you make an hour when you're working. Then put that value on your time outside of work as well. It helps focus the mind.
That's not to say that every hour of the day needs to be spent making money. But it's worth making a mental note of the time-cost of certain activities - such as attending meetings in person rather than doing business over the phone - not just the dollar value of what you're spending.
In my case there's a personal financial cost of shopping at Pak'nSave, much as my inner tightwad would want me to go there. My time is limited and there are far more personally valuable things to be doing with it. That may be having quality time with my children, or taking time out for a yoga class to free up my brain for thinking.
If you're self-employed or in business and your income varies according to your tasks then putting a value on your time can pay handsomely. If 20 per cent of your working day or week produces 40 per cent or 50 per cent of your income, then it's essential to analyse what this time is spent doing.
The answer is to schedule more revenue-generating hours into your week and ditch as much of the rest as you can. Good professionals work out which clients bring them in the real money, concentrate on those and either put not-profitable clients down the pecking order or even fire them.
In the case of a freelance journalist this may be giving up work for low-paying publications, or concentrating on the quicker jobs. In my world we get paid typically by the published word. As a result I often hear freelance journalists say they will only take on work that involves single interviews.
That's because such articles are quicker, and more profitable, than writing Metro-style heavily-researched pieces, which can take days or weeks for the same word rate.
Every industry is different and the time/money equation varies hugely. Self-employed people need to put extra hours in to earn more money - although there is a line where a lack of work/life balance starts to make self-employed people inefficient.
Having said that self-employment isn't a great way to become wealthy because your income is dependent on the number of hours you put in. Self-employed income is "sucker tucker", to quote economist Gareth Morgan.
It's better to use your hours, argues Morgan, building up passive income. In the case of a business person, that's stepping away from the coal face and employing/subcontracting others to do the work, which ideally means the dollars roll in even when you're sleeping.
In the case of freelance journalism that might involve syndicating articles to get more than one bite at the cherry. Or it may involve re-selling them to several non-competing publications, here or overseas. Another option is to write an industry newsletter and sell it as widely as possible, such as Mary Holm's quarterly financial newsletter Holm Truths.
Employed and self-employed people can still make passive income, by investing wisely. It's the catch-cry of property investors. Once they have bought a property, in theory the rent should come in automatically every week. There is, however, tenant management, and maintenance work to be done.
Investment property income becomes truly passive when the management and maintenance is farmed out to a property manager. In the present market this is largely academic because it takes a determined investor to find properties that pay their way, let alone turn a profit.
The median gross yield across New Zealand is sitting at 4.5 per cent, according to the latest Quotable Value figures, which doesn't even cover the mortgage let alone maintenance, insurance and rates.
A classic example of the employee who built up significant passive income was property investor Kevin McCarthy, whom I interviewed a couple of years back. McCarthy held his day job at an electrical retailer to ensure he had sufficient salaried income to satisfy the banks' requirements when he needed to raise a mortgage on a new property.
He actively avoided climbing the greasy pole at work because he made his real money after 5.30pm through property investing.
The other aspect for employed people to consider is concentrating on the tasks that are likely to bring them promotion and pay rises. It's cynical, but if that happens to be buttering up the boss, producing endless reports, or taking on cross-departmental projects, then it may be worth concentrating time on that.
For some people the valuable time is studying to improve skills or it may be networking at industry events to ensure you're the person who is headhunted.
Coming back to investment, it may not be financially sensible to shop at Pak'nSave or spend time with a procrastinating client. But shopping around for a better savings account or cheaper insurance may be much more time-efficient - especially as it can be done online from home. So might be improving your financial literacy.
One bug-bear of mine is time spent in a car, which I keep to the bare minimum. Car time is dead time - whether it be commuting or driving to the shops. That is unless you can do something productive at the same time such as make business calls on your hands-free kit, listen to educational podcasts or CDs, or (if you're on public transport) whip out your laptop to do some work.
Whatever it is that you decide really brings in the dollars, a good time-management plan is essential.
Finally, closely related to the time/money payoff is stress versus money, which one of my colleagues pointed out this week.
His argument is that plenty of finance company investors voted against receivership because they might get six or 12c in the dollar more. But the stress wasn't worth it and they should have cut their losses and moved on.
Recommended reading: Getting a Grip on Time, by Robyn Pearce. Available from Gettingagrip.com.