• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Schedule Appointment Client Portal Login

Wisdom Wealth Strategies

Your Retirement Financial Advisors Denver Colorado

  • Home
  • About us
  • Financial Planning
  • Investment Management
  • Tax Planning
  • In The Media
  • Blog & Social
  • Contact Us

A Universal Truth: Resources are Scarce

Blog & Social Media   |   Featured   |   A Universal Truth: Resources are Scarce

A Universal Truth: Resources are Scarce

ID-10050781

The definition of “scarcity” from Wikipedia is fantastic:

                  Scarcity (also called paucity) is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Unlimited human wants – isn’t that the truth! In our own unique way, we all face this conundrum. Sure, some of us are wanting on a bigger scale (private chef, anyone?), but at the end of the day, we all face the reality of scarcity of money to allocate to our needs and wants. We each must balance our basic needs with our desires within the framework of the money we have available.

There’s a second scarce resource that bears consideration in this framework: time. Time, perhaps, is even more of a challenge. After all, it’s completely inflexible in amount. 60 minutes per hour, 24 hours per day, 365 days per year. Again, individual choices and constraints determine what each person does with his or her time, but there’s only so much available to meet demand.

Now, put the two together. Time and money. Two precious assets, limited in amount. It is the exact balancing act that you’re trying to manage when creating your financial plan. On the one hand, you have time. How much and how long must you work to obtain your “human wants” (retirement, college for kids, vacation home)? Time factors in to asset growth and appreciation, too. Remember the concept of compound interest? The longer the amount of time that savings and investments are allowed to work, the better the outcome in terms of potential appreciation. Most of us, by choice or by chance, have a finite number of earning years. We must utilize the time we’re given in the most efficient way possible.

The same is true with money. How you choose to allocate the money you have available to you is dependent in part on your priorities. The question of how much to put where is at the heart of financial planning. The steps are clear:

  1. “Spend time” creating money through work. You spent one resource to obtain another.
  2. Understand how much money is required to satisfy needs (fixed expenses) and how much goes to satisfy wants (discretionary spending). You’ve just created a spending plan.
  3. The remaining amount must then be allocated appropriately to all of the goals competing for the limited resource (money).

Thinking about time and money in this way can be an avenue for exploring your priorities and goals in a different light. Spend some time alone, or with your spouse or partner, and review how you are spending these limited resources. Are your decisions and your actions in line with what you value? Are you spending your time in the places and with the people you care about? Are you putting your money toward the things that really matter to you, both now and in the distant future, or are you carelessly frittering away your valuable resource? Remember, we each get a finite amount of time and money, so make them count!

 

Image courtesy of cooldesign at FreeDigitalPhotos.net

Filed Under: Featured, Financial Planning

Interested in Working Together?

We’d love to learn more about your financial needs and answer any questions you have about our practice.

Request a Consultation

Footer

Certified Financial Planner

Social

See what we’re up to by following along on social media.

  • Facebook
  • LinkedIn
  • Twitter

Contact

Get directions
(720) 314-8009

Newsletter

Stay up to date by subscribing to our newsletter.

  • Disclosure
  • Form CRS

Copyright © 2022 Wisdom Wealth Strategies, LLC. All Rights Reserved.
Wisdom Wealth Strategies, LLC is an SEC-registered investment adviser. Our firm is notice filed in Colorado and Texas, and may be exempt from notice-filing in other jurisdictions where we serve our clients.


Site Crafted by HOTFIRE CREATIVE