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Graham Duncan, the co-founder of East Rock Capital, appeared on the Tim Ferris podcast in March 2019. He spoke of a concept during that conversation that I can’t stop thinking about — the idea of “time billionaires.”
This insight was flagged by my friend Blake Robbins who described it as “truly profound.” I actually think Blake may be understating how incredible this idea is. Here is the transcript from the podcast conversation:
Tim Ferriss: So time billionaires. What does that refer to?
Graham Duncan: I was listening to a guy introduced a speaker a while ago. And he was saying people don’t really understand the difference between billionaires and millionaires. He said a million seconds is like 11 days. A billion seconds is 31 years. And I remember that …
Tim Ferriss: Oh, shit. That’s a hell of a way to think about it.
Graham Duncan: Right?
Tim Ferriss: Wait. Can you say that one more time?
Graham Duncan: A million seconds is 11 days. A billion seconds is slightly over 31 years. And I was thinking about – Tyler Cowen has a thing about cultural billionaires –
Tim Ferriss: Marginal Revolution?
Graham Duncan: Yeah. In one of his books, he talks about cultural billionaires. I feel like in our culture, we’re so obsessed, as a culture, with money. And we deify dollar billionaires in a way that – it’d be nice to co-opt that term the way Tyler Cowen did with cultural billionaires. And I was thinking of time billionaires that when I see, sometimes, 20-year-olds – the thought I had was they probably have two billion seconds left. But they aren’t relating to themselves as time billionaires. And I was thinking about how if you could – what would Rupert Murdoch, who’s worth $20 billion – he’s 87 years old. What would he pay if he could take the next five years of someone’s 20-year-old healthy body, mind, etc.? And for that 20-year-old, how would they price it? Because I was thinking at various points of my career, I might have sold the next five years for something.
And over time, my pricing has gone vertical because the next five years, if I were to lose – and the key to this question is that you can’t sell the five at the end of your life. You gotta sell them right now. I don’t know how I’d price it because my kids are of a certain age that they’ll never be again. But I don’t know that I live every day that way. But I aspire to. So I was trying to capture – I heard Tim Urban on your podcast. And I started reading his stuff. And I find his writing style and the topics he is interested in just amazing. He has this concept of life calendar. And I bought his life calendar. He sells it as a poster. And what he does is he puts a week – he does a circle for each week. So he has 52 circles on the horizontal and then 90 rows so that you can see a 90-year life in weeks. And what’s startling about the picture – again, to this question of how long is a billion seconds – is how short it actually is.
I have read this excerpt of the transcript too many times to count at this point. It perfectly breaks down the difference between a time billionaire and a dollar billionaire. One has financial resources and the other has life resources. Our society overvalues the former, but undervalues the latter.
This concept of a time billionaire really hits home for me, because one of my favorite movies is the 2011 movie In Time starring Justin Timberlake. Ignore the Timberlake detail. The premise of the movie is that everyone is paid in time, rather than money. You live until you are 25 years old and then the clock on your forearm starts ticking down towards 00:00:00. If all of your time expires, you die young. If you have accumulated enough time, you can effectively live forever.
The metaphors are deep in this one. From rich and poor to young and old, the idea of time as money is a powerful one. Which brings me to a question that someone tweeted at me recently (wish I could credit them but can’t find the reply this morning):
If you had the opportunity to switch places with Warren Buffett, would you do it? You could be one of the richest people in the world. But you would also have to be 90 years old.
Majority of people think they want money until they are forced to evaluate the lack of time that comes with it in this scenario. Quickly, the value of time becomes evident and people opt for being younger, rather than richer.
So what exactly does this have to do with investing?
Well, frankly everything. We constantly think of billionaires as having significant advantages in financial markets. They have enormous resources. They have experience. They have a network. And they can use their resources to buy leverage (employees, more capital, etc) to accomplish their goals. Maybe this is the wrong way to think about it though?
Having a billion dollars is great, but having a billion seconds is priceless. There is no amount of money in the world that can purchase immortality. Every human eventually runs out of time. So what would it look like if young investors started to think of themselves as wealthier than their older, historically richer, investing colleagues?
This idea of being a time billionaire immediately creates an opportunity to lean into your greatest resource — time. The time billionaire can have a time horizon that is counted in decades. The time billionaire can afford to be patient. The time billionaire can slowly compound money over time. There is no rush. There is no compressed timeline that clouds the judgement of a time billionaire. The time billionaire has a significant advantage when it comes to controlling their emotional state.
They have so much abundance of their resource — time — that they can recover from almost any mistake. The time billionaire is unshakeable in a sense.
Every great investor understands that they should find their advantage and then leverage the advantage to profit in the marketplace. Some investors have incredible experience. Others have incredible wealth. And the youngest investors have incredible time.
Many of you reading these letter aspire to be a dollar billionaire, but you fail to recognize that each of those financial titans would gladly switch seats with those who have more time. The time billionaires are the wealthiest among us, yet they fail to recognize the wealth that they enjoy.
With modern technology, the average human will likely live into their early 80s. A billion seconds is just over 31 years. The 20 year old has two billion seconds. The 50 year old has one billion seconds. Take a step back today and ask yourself — do I invest my capital based on the greatest resources that I have access to?
For some of you, that resource is money. But for most of you, that resource is time. Press your advantage. Start thinking in terms of decades. Use your status as a time billionaire to become a dollar billionaire, but remember — the time billionaire always dies with zero.
Have a great start to your week. I’ll talk to everyone tomorrow.
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Swiss Say They Were Successful With Digital Currency Experiment: The Swiss National Bank and partner organizations said they successfully conducted experiments to push forward understanding of how digital currencies could work within the country’s financial system. In ‘Project Helvetia’ the SNB, the Bank for International Settlements and the financial infrastructure operator SIX linked the existing interbank payment system to a distributed ledger, according to a joint press release Thursday. They also tested issuing digital currency onto a blockchain-like platform. Read more.
Apple Co-Founder Wozniak’s New Venture Lists Token to Help Fund Energy Efficiency Projects: Apple co-founder Steve Wozniak has launched Efforce, a company that facilitates investments in energy efficiency projects via cryptocurrency and blockchain technology. The company aims to be a marketplace to streamline the process of financing and undertaking such projects by enabling them to receive crowd contributions from investors via its token, WOZX, which was listed on Thursday through HBTC. Read more.
JD.Com Says It’s Accepting China’s Digital Yuan for Latest Lottery: Chinese e-commerce firm JD.Com says it’s become the first online platform to accept the nation’s central bank digital currency. As reported by Reuters on Saturday, JD Digits – the company's digital technology arm – will accept the digital yuan at its online shopping center during the second mass giveaway of the token in the city of Suzhou. Read more.
MicroStrategy Buys Additional $50M in Bitcoin: MicroStrategy CEO Michael Saylor announced his company’s third bitcoin purchase on Twitter Friday evening, per SEC filings the same day. Saylor purchased 2,574 bitcoins for $50.0 million in cash bringing the business intelligence company's treasury holdings to approximately 40,824 bitcoins. Read more.
Binance Expects to Earn From $800M to $1B This Year, CEO Says: Cryptocurrency exchange Binance will likely earn between $800 million and $1 billion this year, as market uncertainty drives interest – and trading – in cryptos, CEO Changpeng Zhao told Bloomberg. That’s up from about $570 million in 2019, according to the report.Read more.
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Lyn Alden is the founder of Lyn Alden Investment Strategy, which provides market research to hundreds of thousands of individual investors and financial professionals. Lyn’s focus is on value investing with a global macro overlay, including currency differentials, shifts in monetary policy, and equity valuations.
In this conversation, Lyn and I discuss:
Long term debt cycle
Sovereign debt problems
Petro dollar system
Value stocks vs value traps
I really enjoyed this conversation with Lyn. Hopefully you enjoy it too.
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