“Time is money”, coined Ben Franklin circa 1748. However, the notion of a person’s time being valuable is something rooted in human nature. We tend to make decisions using some analysis of how much time the task may take. The more time required usually the bigger the payoff must be. For example, you may answer a few questions if I give you a dollar; however, if I asked you to write an essay, you may demand more money. Why is this the case? Quid pro quo, latin for “something for something”, may explain how we evaluate the opportunity cost of the time we must give up in order to write that essay.

The key to this evaluation is that even though you may not earn any money with how you spend your time instead of writing the essay, you gain some value which you perceive to be higher. My intention in this post is not to debate how to quantify or estimate this value, but rather to acknowledge that this value is real and upward sloping.

Since I argue that time has value, I want to introduce the notion that some people may choose to swap their time for something immediately, while others may choose to invest their time in order to receive a greater payoff in the future. I believe the latter option is similar to a capital expense, or in other words, an expense that is recognized as an asset on a balance sheet. I will call this time investment Chrono-capital, or C-cap for short. Let’s look at a couple examples.

Choice 1 — swapping time for immediate value — I may go perform a job that takes 10 hours and I will get paid $10/hour. The total payoff is $100, and assuming, this job has no other major benefits, I gain nothing besides the $100. This would be a direct swap of time for something of adequate value, i.e. money.

Choice 2 — investing time for future payoff — the classic example is education. Although most people actually pay to be educated, they do so because the anticipated payoff is much greater than the investment of both money and time. Thus foregoing income now in order to receive a higher income in the future.

I am sure by now you are asking the obvious question: Why is this important? As straight forward as it all may seem, it is very relevant to many topics. For instance, in a future article I will talk about the importance of C-cap for companies like Facebook, Google and Apple. Critics may say that there is no difference between C-cap and switching costs; however, my response is simply that costs only are incurred upon change. Rather than analyzing the cost at change, C-cap allows us to evaluate how consumers may choose to act based on prior C-cap investment decisions and payoffs. Surely a company may be more valuable if consumers are investing C-cap into it, and that can be overlooked when only viewing switching costs.

In conclusion, time has a tangible value that accumulates at what I hypothesize to be a non-linear rate. We can assess how individuals recognize C-cap on his/her own personal balance sheet, which will in turn allow us to predict future decision-making behavior. Ultimately, I will try to derive how to approximate a value for some forms of C-cap in order to determine what it may be worth to companies or individuals.