The Time Cost of Capital

This is about the time value of money—a crucial concept. Recognize that money has a time cost.

The time value of money simply means the same sum of money meant something entirely different if you had it ten years ago versus having it today.

Ten years ago, a hefty six-figure amount could have covered a down payment on an apartment in Beijing. Today, that same amount might barely get you a parking space.

What's driving this? It's the power of time. That's what we call the time value of money.

This principle applies to any field whatsoever.

Xiao Ming and Xiao Qiang might have been classmates. Xiao Ming thought hard work was all that mattered. Xiao Qiang understood that everything has a time window. In his first three years, he hustled relentlessly, sparing no effort to beat the clock. Three years later, he was a team lead. Eight years later, he was a senior executive with multiple properties, stocks, and early access after the company's IPO—doors swinging open, opening up endless possibilities.

And Xiao Ming? One misstep led to another. Eight years later, all he had to show for it was a layoff notice.

That's life.

Two troops racing to seize a hilltop. One marches hard with a five-minute rest every hour and arrives the next day. The other sprints without stopping until half the men drop from exhaustion; the surviving half reaches the summit dozens of minutes early, sets up machine guns, and mows down the straggling army as it finally arrives.

That's warfare. Life is a battlefield.

By the same logic, when you're young, time is extraordinarily precious—because you're out there seizing the hilltop. Every second you save could be the difference between beating countless peers or falling behind.

Time is incredibly valuable. Extremely so.