Compounding Time


27 January 2019

Last night I looked in the mirror and decided it was time. Up until recently a hair cut would have meant a trip to the barber. Typically, barbers tend not to want to work when I have time to visit them, and so for the cost of two hair-cuts I bought the required equipment and now do it myself (with a little assistance). The electric clippers have long been paid off, but the main reason I continue to cut my own hair is not monetary, it actually saves me time.

Over the past centuries we have slowly outsourced almost every aspect of our lives. Growing food, making clothing and repairing goods are unheard of in many circles. Having someone drive you was formerly a privilege of the ultra-wealthy but is now commonplace. From an economics perspective, all of this makes sense. If I specialise to provide a required good or service, I can become much better than average at my profession, and my earnings will rise accordingly. I can then use that additional money to trade for the skills I’ve lost, or no longer have time to perform—seemingly mundane tasks like cooking, cleaning, grooming, repairing and so on. Now, step outside the economic perspective for a moment and major flaws in this thinking become apparent.

Many of the tasks that we have outsourced over the years (knowingly or otherwise) have a physical component. Shopping requires walking and carrying weight, cooking is completed standing, while cleaning and gardening involve a significant amount of reaching and bending—mopping the floor will have your heart rate up in no time. If we pay someone to perform these activities for us, they also do our movement. Further compounding this loss of movement, many of us sit to earn the money to pay for these services. We sit in meetings, at computers, on the way to the office, and on the way home. Mentally exhausted from the long day at the office, and with the chores quickly out of the way, or not required at all, it is tempting to spend the evening sitting or lying in front of the TV. Satisfaction at work rarely, if ever, comes from our salary, but rather the successful completion of tasks. Doing things for ourselves provides that feeling we so crave, as well as much needed movement.

In addition to making you fit, insourcing also has the potential to save you time and money. In the case of my hair cut, while the barber is faster, I no longer have to travel or wait. I also don’t have to pay. If I’m not spending money to complete necessary tasks, then, in essence, I am earning; earn and spend less, or earn more and spend more, your bank balance remains the same. Unfortunately, most office jobs expect you to work 40 hours a week (or more). You can’t just ask to reduce down to 39 hours a week now that you have reduced your spending. But the money saved can be used to reduced debts or provide flexibility in the future.

When you consider that it’s a way to earn time and money (tax free!), why don’t more people do things themselves? What insourcing does demand is mental effort. It requires us to plan and make decisions (shopping and cooking), be physically active (cleaning and gardening) and perform new skills (hair-cuts, sewing and repairs). The problem starts when we devote a huge amount of our mental energy to our paid work and have little left when we arrive home. When this happens it is easy to get trapped in the cycle of earning and spending. This problem doesn’t have to be solved tomorrow, small changes will take you in the right direction—a picnic instead of a meal out is insourcing. Bill Gates, one of the richest people in the world, still does his own dishes.

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