It's About Time to Work Less
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When it comes to achieving financial independence (FI), it’s about time. Pun intended.
Financial independence takes time – anywhere from 5-15 years, and possibly more. If you’re serious about pursuing FI, the miracle of compounding will make time one of your greatest allies. As the old investing adage goes, time in the market is beats timing the market. I’ll be writing more about saving, investing, and other ways to achieve FI, but that comes later. The path forward starts with creating the belief, determination, and resolve to make a change. As I wrote in a previous post, sticking with a goal like financial independence requires more conviction and persistence than most other goals. You have to know your why.
For me, it’s about time.
The Value of Time
I hardly need to explain the value of time. Time is one of our most valuable assets, yet it is finite, and we can’t make more. We never know how much of it we, or our loved ones, have. The only thing we know for sure is that with the passing of every hour, minute, and second, we have less than we once did. I promise I’m not trying to be profound. The enigma of time has both plagued and captivated the greatest philosophers and poets – it has been described far better and by those much wiser than I am.
What I do know is my relationship with time. I am a conscientious person, but I confess that I don’t make the most of my time. I am not always productive, or efficient with time. I don’t mean to, but sometimes I waste my time and the time of others. I am not as mindful, present, or appreciative of time as I should be. Regrettably, I am not always generous with my time, and I am not always wise when I give it.
Still, I know that time is precious.
At surface level many people think the motivation for financial independence is money. Money is nothing more than an instrument. Benjamin Franklin said “time is money” but it’s also true that money is time. Money can buy the time that affords us the freedom and autonomy to do what we choose. But in exchange for money, we’ve sold our time to our jobs.
Who Owns your Time, You or Your Job?
I want to say I own my time, not my job, but I know that’s not true. On the one hand, it feels like I am freely trading my time and talents for a paycheck. This is the relationship most of us have with our employers. At the same time, am I free to stop exchanging my time for money? For a while yes, but not indefinitely. I could say I own my time insofar as I choose my specific job, but the fact remains that I’m still dependent on an employer for a job.
This is the illusion of choice with a career. We think that because we choose our jobs and we’re free to move from one to the next, we’re also in control of our time. That’s not quite the case.
But we chose our careers in the first place, didn’t we?
Technically correct but that line of thinking breaks down. If you choose to go on a rollercoaster, but halfway through you get sick to your stomach and want off the ride, are you in control of your time? Does how much you’re enjoying the ride change whether or not you’re in control of the time? If I put my foot in my mouth and say something stupid to my wife, that was my choice, but I’m going to spend whatever time it takes to get out of the doghouse if I want a happy marriage. If you choose to have a child, your time is very much not your own, at least not for the next 18 years of your child’s life.
Clearly, we all make choices that have consequences. Said better, we make commitments that speak for our time and bind us to others - sometimes positively, and sometimes negatively. That’s a good thing. That’s called responsibility. But by making those choices, and by creating that responsibility, you don’t have as much control over your time as you think. You don’t “own” it. You’ve committed it to someone or something else. That isn’t inherently bad or good, but it is an issue if you want to stop selling your time to your employer and if you can’t get off the ride.
We’re free to choose a new career, aren’t we? Don’t we own our time in that respect?
Again, technically correct, but practically wrong. As I’ll write more about in an upcoming post, re-inventing your career is not such an easy undertaking. Besides, what if a career - continuing to trade your time for money - isn’t what you want anymore? Beyond this illusion of choice, there are more obvious ways your job owns your time:
Can you choose the hours you work?
Can you choose which days you work?
Can you not show up to work if you feel like it?
Do you need approval to take time off work?
How much time can you realistically take off?
Do you tend to work longer hours than you would like?
Does your job interrupt your time outside of work?
Can you set your own objectives and prioritize what you work on?
Are you at the mercy of your calendar?
Can you take time during the day if personal issues arise?
Bottom line: do you have control over when and how you do your work?
Having your time beholden to an employer might make self-employment seem like a more attractive option, but the problem could be even worse. Being self-employed can be a very rewarding career, but most of the time it still involves trading time for money. The difference is that all the accountability is on you. You have the pressure of generating income, developing business, running the operations, responding to customers, managing the financials, etc. You can hire employees to handle these aspects of the business, but then you are responsible for training and managing them, in addition to making the payroll. A self-employed job is still a job.
So, who owns your time? Your job does. At best, you’re leasing your time to your employer, even if that employer is you.
Your Job Takes Time!
Think about your (roughly) 16-hours of waking time each day. If you’re like the average full-time worker, you work about 8.5 hours a day. Now add another hour for a commute. What did employees love about being forced to work remotely during the pandemic? Getting an hour of their day back. Add at least 1 more hour for getting dressed and ready for work, decompressing from work when you get home, then still neurotically checking your email and calendar to make sure you didn’t miss anything important for the next day before your head finally hits the pillow.
Conservatively that’s 10 ½ hours or 2/3rds of your waking time spoken for by work, at least 5 days a week. But at least we can feel grateful we get the weekend off, right? Except now we have chores to do - housework, yard work, grocery shopping, taking the kids to their activities, paying the bills, going to the doctor, and dealing with all the other adulting there’s no time for during the week. That’s assuming we don’t have to work over the weekend.
According to a 2015 BLS study, 31% of single job holders and 58% of multiple job holders work on a weekend day. Weekend work is normal if, for example, you work in a restaurant or retail job. In those cases, their day off might actually be a Monday. In general though, Americans are more likely to work at night and on weekends compared to other rich countries, a 2014 NBER study found. When the weekend comes and you need to work, it hurts. It’s cutting into the very little free time you have.
Just Be More Efficient and Do More With Your Time
Isn’t the real issue that we’re just not being efficient with our time? I suppose we could talk about life hacks, efficiency, productivity, and time management. What if we found a way to better maximize our waking hours and outsource the mundane things we hate spending time on? The internet will gladly point you toward books like Tim Ferriss’ The 4-Hour Work Week or a variety of listicles enumerating all the ways you can take back control of your time.
There’s wisdom in Ferriss’ philosophy to seek the “minimally effective dose” of effort required to achieve your most important goals. There’s value in thinking through how to automate and create systems for low value tasks you don’t enjoy. I personally enjoy a good listicle and appreciate a life hack as much as the next guy, but can I be honest? I don’t want to hyper-optimize my life just so I can feel better about the third of my day that isn’t consumed by work. I just want the other two-thirds back. Don’t you?
The other option would be to try and emulate the uber-accomplished super-human who sleeps 3 hours a night and finds a way to be the CEO of a start-up, raise children, climb mountains, help the homeless, play in an orchestra, train for an Ironman, write a novel, and travel the world because they’re awesome and we’re just lazy. It’s not that work is getting in the way of our other life goals, it’s that we’re just not trying hard enough to kick-ass in our career and dominate all other facets of life at the same time.
I’m obviously being a bit tongue in cheek, but there are some remarkably accomplished and admirable people out there who aren’t far off the mark. When I hear their stories (once the sickening envy subsides) I am often inspired to do more. But there are also times I hear those stories and I just feel tired. If you have the energy, talent, and resources to do all that, I say go for it. And yes, there is no substitute for harder work (as if you’re not already working hard). But also, not to diminish anyone, it helps to be a little lucky on the road to those successes too. For the rest of us, let’s ground ourselves. It’s about time, and more of it.
More Time Means Quality of Life…or Death
On a whim, I created a side-by-side comparison of quality of life rankings and average annual hours worked for 40 countries which had data on both. Quality of life rankings come from Numbeo and includes factors like purchasing power, pollution, house price to income ratio, cost of living, safety, health care, traffic commute times, and climate.
Only 2 countries in the top 10 for quality of life, Australia and New Zealand, were above average in hours worked. Estonia is another outlier, but perhaps the Baltic Tiger for making up for communism. The U.S. is a modest 14th in quality of life and 32nd out of 40 in hours worked. The correlation between quality of life rankings and hours worked was strong at -.71. In other words, for the 40 countries compared, as hours of work decline, quality of life tends to goes up.
It’s a crude correlation, but a very noteworthy one. Clearly the top of list contains prosperous, high GDP per capita countries with the means and resources to address quality of life issues. Interestingly though, more hours of work, a proxy for productivity, isn’t associated with a higher quality of life score – it’s the opposite. In fact, the relationship between annual hours worked and per capita GDP is also negative. In my opinion it’s no accident that many of the countries ranking highest in quality of life, also rank lowest in average hours worked per year. When it comes to quality of life, lower hours of work is a feature, not a bug.
The Organisation for Economic Co-operation and Development (OECD), which provides the data for hours worked in the table above, evaluates work-life-balance (WLB) as part of its overall Better Life Index. In the OECD methodology, countries scoring higher on WLB have more hours devoted to leisure and personal care, and a lower percentage of employees working 50 or more hours a week. The OECD finds that the amount and quality of leisure time translates to overall well-being and can bring additional physical and mental health benefits.
On a second whim, I also correlated annual hours worked with each of the 40 countries' Happiness Score this time finding a moderate negative correlation of -.48. As hours of work decrease, subjective well being tends to increase. My ad hoc analysis aside, multiple studies have found a relationship between hours worked and life satisfaction. A 2020 study from The Journal of Happiness Studies found that “implementing work–life balance policy leads to the improvement of life satisfaction for both men and women.” A 2022 study from Health Economics Review found “a negative and significant correlation between hours of work and life satisfaction, thus implying that a shorter working week can improve Europeans’ life satisfaction.”
These findings are important to dwell on for a moment. It’s not obvious that fewer hours of work should result in higher life satisfaction. For lower-income hourly workers, working more can be the only way to increase their pay and subsequent standard of living. Reducing hours of work directly impacts some workers’ bottom line. On the other hand, salaried workers have guaranteed income, so fewer hours worked won’t hurt their paycheck and could notionally boost satisfaction in other facets of life.
In fact, this is exactly what a longitudinal study from Korea found. Looking at data from 2007-2019, when working hours decreased, the overall life, work, and leisure satisfaction of employees with higher socioeconomic status showed a significantly sharper increase than that of workers with lower socioeconomic status.
Just as fewer hours of work seem to have positive benefits, conversely, the OECD finds long hours of work may impair personal health, jeopardize safety, and increase stress. We know this from observing the world we live in. Extreme examples of overwork come from places like China, where it is estimated that some 600,000 people die from work-related stress and its effects every year. Many of these deaths are attributable to poor working conditions and lack of labor protections, but culturally the Japanese concept of “karōshi”, literally death from overwork, is a phenomenon in many Asian countries.
Closer to home in the US, as concerns were being raised by analysts about their 95-hour work week and “inhuman” conditions, Goldman Sachs CEO David Solomon was telling employees: "Just remember: if we all go an extra mile for our client, even when we feel that we're reaching our limit, it can really make a difference in our performance.” Notorious for overwork, investment banks pledged to cap working hours following the tragic death of intern Erhardt Moritz in 2013. Erhardt died as a result of an epileptic seizure after working 72-hours straight, plus five other all-nighters in a two week period while interning at Bank of America Merrill Lynch in London. The coroner found exhaustion couldn’t be definitively linked to his death, but said fatigue could have been a trigger.
While these extreme examples of overwork are not the norm, they are an inevitable consequence of cultures that elevate work and careers to such high levels. But work doesn’t have to be overwork in the extreme to be bad for us. For example, a study published in 2021 by the World Health Organization (WHO) showed that working more than 55 hours per week increases the risk of stroke by 35% and the risk of dying from heart disease by 17%, compared to working 35-40 hours per week.
In fact, numerous studies have documented the relationship between longer hours of work and decreases in physical, mental, and occupational health (e.g. injuries). For example this 2019 meta-analysis, spanning 20-years of data, identified cardiovascular and cerebrovascular diseases, hypertension, diabetes, depression and anxiety, stress, smoking and alcohol consumption, sleep and fatigue, and occupational injury as just some of the topics negatively associated with long working hours.
About his book, Dying for a Paycheck, Stanford Business School professor Jeffrey Pfeffer writes: “You don’t have to do a physically dangerous job to confront a health-destroying, possibly life-threatening, workplace. Just ask the manager in a senior finance role whose immense workload, once handled by several employees, required frequent all-nighters—leading to alcohol and drug addiction. Or the dedicated news media producer whose commitment to getting the story resulted in a sixty-pound weight gain thanks to having no down time to eat properly or exercise. Or the marketing professional prescribed antidepressants a week after joining her employer. These individuals are not exceptions—they are too often the norm. Every industry is filled with similar horror stories, and the costs, to both employees and their companies, is enormous—and worsening.”
More Work Doesn't Pay Off
Long hours of work and associated stress is very literally making us sick, but the irony is they're not necessarily making us more productive. In the classic study on this topic, economics professor John Pencavel found that after 55 hours, productivity drops so much that putting in any more hours would be pointless. In fairness, the often cited study was based on 100-year old data from munitions factory workers - not exactly an analog to today's knowledge workers. Newer evidence from teams at a Japanese design firm is more mixed. The study found longer hours tended to drop productivity for the team's best workers, but this effect was smaller for lower-ranked workers who worked fewer hours. In another headline making study out of the U.K., researchers found that over the course of an eight-hour workday, the average employee works for about three hours — two hours and 53 minutes, to be more precise. Finally, in the context of careerism, the most ironic data yet comes from a global strategy consulting firm where some men found covert ways to work far less than their peers who fully devoted themselves to work, and yet were able to “pass” as ideal workers, evading penalties for their "noncompliance".
The Productivity of Working Hours, John Pencavel, April 2014
The Misnomer of Work-Life-Balance
Ultimately, it’s about time. As the OECD says, “an important aspect of work-life balance is the amount of time a person spends at work. Regardless of how you value your time, the data seems clear. More time/less work equals higher quality of life, and less time/more work equals a higher risk for physical, mental, and emotional issues.
Given the assumption that work is an obligatory fact of life, more work-life-balance is clearly better, but the term “work-life-balance” bothers me in ways it didn’t used to before. It presumes there’s an ideal mix of time spent working, versus time spent on...the rest of your life. If you are exchanging 2/3rds of your waking time for money; money that you need to live on, how are you able to live your life to the fullest? In my estimation that is trying to balance two incompatible things. In that scenario, you don't own your time, your job does. Based on the data, and our own common sense, isn't more time for life and less time for work is better? As opposed to work-life-balance, why not simply say live more, work less?
Time is our most valuable asset, but we don’t really own it if we’re exchanging our time for money
Two-thirds of your day is spoken for by work. Do you want to be a hyper-efficient super-human or with the 1/3rd you have "free" or do you want to find a way to get the other 2/3rds back?
The data is in: fewer hours of work leads to higher quality of life.