The 1% amount is quite a significant number in the world of financial independence and passive investing. There's tonnes of material out there talking about how an improvement of 1% on your average annual returns over the long run will result in significant gains. The math doesn't lie and it's got us all searching hard for places where we could find that extra 1%. But have you ever wondered what could happen if you improved the way you spent 1% of your time instead?
Everybody has the same amount of time in a day, and 1% of a day is just under 15 minutes. It sounds insignificant, especially if you try to quantify its value based on your annual salary. With an annual salary of £50k, 1% would only amount to £500; not exactly a huge amount. But when you don't think of it in terms of money and consider it as "time you can spend", you will discover that you could put it towards a number of things that will add far more value to your life. The key then is where will you find that extra 1% of time?
What is 1% of time
The method to calculate 1% of time is actually really easy.
First, we need to set the time-frame that we're working with. Let's use 1 year because investment returns are also typically calculated using this time-frame. That would mean we're working with 365 days.
Then we simply divide by 100. This would give us 3.65 days, or 87.6 hours of time in total.
87.6 hours across a year would equate to less than 15 minutes a day. 14.4 minutes to be exact.
The beauty of this equation is that it is applicable universally - you and I, and everyone else in the world, has the same amount of time in a day or in a year.
Now we can try to calculate the value of that 1%.
The go-to method of calculating the value of time is to use the annual salary figure. This makes things really easy as 1% of an annual salary of £50,000 equates to £500 for example.
But the problem with this method is it makes it seem like 1% of time isn't worth very much... that you're not actually missing out on a lot by wasting just 1%. After all, it's less than 15 minutes a day...
Yet by thinking that way you could potentially be losing out on so much value.
Don't value 1% of your time in terms of money. Instead, value it in terms of time that you can spend more effectively towards the things that improve and build your life.
In the following sections I will work through what the additional 87.6 hours in a year could equate to for me, and then we can determine its value.
10 to 12 more books read
A quick search on the internet suggests that a slow reader can manage around 30 pages an hour, assuming 250-300 words per page. An average reader would manage 40 pages, and a fast reader would manage 50-60.
I read quite regularly so I estimate I read slightly quicker than average - let's say 45 pages an hour.
With 87.6 hours to spend I'd be able to read 3,942 pages, which would be around 10 to 12 books if they are around 330 to 400 pages in length each.
But even if I read at a slower pace - 30 pages an hour - I'd still be able to read an additional 7 or 8 books throughout the year.
Reading books has always been touted as an effective way to expand one's own knowledge, which can lead to better opportunities in life. Whether or not those opportunities result in higher earnings is down to the person, but it's hard to argue that spending 1% of time on expanding your knowledge isn't a good thing.
Even at just 6 books across the year - meaning you're reading slower than a slow reader - you're likely to see a noticeable expansion in the things you think about, and how you think about them. In my opinion this is worth far more than the £500 I would've "got" had I simply valued my time based on a £50,000 annual salary.
An additional 2kg of fat lost
For myself, 3 days of working out per week is typically enough to keep my body healthy, with each session lasting around an hour including all of the warm up and stretching.
87.6 hours across the year would mean I could get an additional 87 workouts in, which would be an additional 1.67 days of working out per week.
It wouldn't even need to be as intensive as my regular 3 days of working out - I could simply focus that time on flexibility and stretching, plus some lighter exercises, to improve my body's overall health while still allowing it to recover from the more intense calisthenics sessions.
I could even just go walking.
Based on generic calculators online I would burn an additional 161 calories an hour when walking at a normal pace compared to simply sitting. That would amount to 14,103 additional calories burned throughout the year.
A kilogram of fat is 7,700 calories so by spending 1% of my time simply walking I'd be able to lose almost 2kg of fat over the year.
The best part - I wouldn't need to change anything else in my life. No expensive gym memberships, no personal trainers, no overpriced healthy diet plans.
If you were offered £500 or 2kg less overall body fat for 1% of your time, which would you think was more worth it?
Become conversational in a new language
While each language has its own nuances and differences a very rough measure of fluency would be 10,000 words in your vocabulary.
But to become conversational you only need to learn around 1,000 to 3,000 of the most commonly used words.
Conversational means you could navigate everyday life situations such as going around using public transport, shopping for groceries, and having basic conversations with other people in that language.
It might not be as smooth as having a chat in your native language but you'd be able to manage.
I'm currently learning Mandarin Chinese and I've adopted an approach where I learn 10 new words each morning before doing anything else. This takes around 15 minutes of solid focus.
Obviously I need to spend more time after learning the word to practice and commit it to long term memory, so let's drop the number of words learnt down to 6 new words a day using 14.4 minutes (1% of my time).
That would allow me to learn 2,190 words across the year.
I'd be capable of reading a large amount of news articles, menus, road signs, and also be able to have everyday conversations with some level of confidence.
It would open many doors in my life as I'd have a broader view of the world by being able to see it through the lens of another culture, and I could even think about living and working abroad for a period of time to experience more in life.
At the very least, I could use my language skills to avoid overpriced tourist traps whenever I'm on holiday at a country using that language - and also have more confidence to go to areas where English isn't really spoken.
What price would you put on more doors around the world being opened to you?
Increase time spent on my side hustles
It takes me around 8 hours in total to write each blog article and I publish once a week. This means I spend 416 hours (8 x 52) on this blog in a year.
Therefore, putting in an additional 87.6 hours would represent a 21% increase in time input.
I could choose many different ways to invest that time into my blog. I could write more articles, or I could channel it towards promotional activities such as creating social media posts, reaching out to potential partners, and simply being more visible in general.
Regardless of what I do it would be going towards "building" my side hustle so that it may one day provide me with an income that at least supplements some part of my living.
The key point here is that 1% of time doesn't seem a lot but is actually quite considerable. Many people would like to earn a little extra money on the side, even if it isn't passive, but they "simply don't have the time".
But in reality most people do.
87.6 hours can basically be divided into 44 weeks of 2 hour blocks, with the remaining 8 weeks (out of the 52) being your "break" from all the hustling. In that 2 hour weekly block you could do all sorts of side hustles.
For things with an almost immediate return you could be a driver, deliver food orders, do two tutoring sessions, or any other "gig" of that nature.
Alternatively you could be more like myself and spend it on building something that you hope can provide you with a more passive source of income in the future.
If you can't spend 1% of your time building your financial independence then you have to ask yourself if you actually really want to get there at all.
Where can you find 1% of time
So it turns out that 1% of time is in fact very valuable. Much more than your annual salary would imply. But where can you get this time from?
Obviously I don't know what's going on in your life so I don't want to make any assumptions, but let me reveal how I found additional time for myself.
Whenever friends first visit my house they ask why I don't have a television, or they say "so where do you plan on putting your television?"
I simply point to the stack of books I'm currently reading. I don't have any on-demand subscriptions either.
When it's late in the evening and I've done what I needed to do for the day, I simply go to sleep instead of browsing through social media or playing video games. The earlier I sleep the earlier I can get up with a fresh mind and motivation the next day.
After I've gotten my 7 hours of good quality sleep I get up. Even on the weekends or my days off work. There are no more lay ins until midday.
Television, mindlessly browsing social media, gaming, and oversleeping. It's in these areas where I was able to regain time back in my day without losing anything by "skipping them".
Be honest with yourself. If you don't see that photo posted by an old schoolfriend whom you haven't spoken to for 10 years, or if you don't watch the latest popular TV series that everyone is talking about, or play yet another version of FIFA, or if you don't sleep for 12 hours straight, what do you really lose?
Yet the thing is I do still watch movies, and browse social media, and have moments where I simply relax and enjoy my hobbies. Remember we only need to find 15 minutes each day to make our 1% of time.
The difference between now and in the past is that I never let them take over the things that are actually important.
In my opinion you lose nothing by skipping those time sinks, but you do lose a lot of value by becoming trapped within them.
The value of time (Final Scribbles)
With the examples and workings in this article I have simply looked at 1 year where I spent 1% of my time more effectively.
But when it comes to financial independence and investing we often look at decades.
10 additional books a year will become hundreds. 2kg of fat lost will became a lifestyle of improved health, and a longer life. Becoming conversational in a new language would lead to fluency in perhaps more than one.
Yet 1% of time valued at £500, based on a £50,000 annual salary, would only amount to £5,000 over a decade. Double or triple that number if you like, it makes little difference.
By realising that you need to value your time as "time spent" rather than as "equivalent earnings" you will come to learn just how powerful a 1% improvement can really be.
You're always looking for the extra 1% improvement on your investment returns, but don't forget or ignore that it might be easier to improve how you invest 1% of your time instead.