The $5,000 Fallacy & 4 More Hours
My junior year in college I took a personal finance class. This wasn’t the most studious era of my life. Which means I also re-took the class! Taking personal finance twice was one of the best things that ever happened to me.
One lesson I particularly remember from that class was the $5,000 fallacy. Granted, this was a long time ago. Five grand may not seem like much today. The concept is the same, regardless of the dollar amount.
In a study conducted by a financial organization, a vast majority of people stated they’d save and invest more money if their earnings increased by $5,000. The remarkable thing: $5,000 was the consistent number, regardless of income. High earners in excess of six figures and those with incomes of $20,000 agreed, they’d commit more to savings if they just earned $5,000 more each year.
The point: most people spend every dime they make. Regardless of how many dimes they make.
Guess what? It’s the same story when it comes to time.
Give Me 4 More Hours
When interviewing business people on my podcast, I ask: “If I gave you four more hours per week, how would you spend them?”
People never struggle to answer how they’d spend additional time. What they’re really saying when they answer the four hour question is: “I don’t do as much of “X” as I should. I know it’s important. But it’s not so important to me that I’m doing it now.”
Remind you of the $5,000 Fallacy? People know they should save. But saving isn’t as important to them as frivolous expenditures. So they pretend they’ll more responsibly invest the next $5,000.
I can’t magically give you 4 more hours. You already have them. Just like most folks have money they could save and invest. They just choose not to, then make excuses for why they aren’t.
I’ll ask again:
How would you spend 4 extra hours per week if you had them?
Now where are you going to find those four hours in your existing week?
You can always tell yourself you don’t have enough time or money. Or that you’ll do a better job managing it when you get more of it. That’s a fallacy.
Make yourself rich by investing the time and money you already have.
Damian Mason is a speaker, writer, and businessman. www.damianmason.com