Today, I was hanging out with my old buddy and co-worker Mike W. for the first time in about half a year. I have to admit he was something of my archetypical ideal of a spendthrift. He earned at least 50% more money than a normal family of four, but he didn’t save much. He ate out at expensive restaurants, and even ordered 400台幣 meals to wolf down between classes. I made occasional remarks in the office about the glories of living below one’s means, but nobody really seemed to agree with me. He did have really cool tech toys…

And today? He showed up at our friend Martin’s place and was all fired up about investing. He was talking about various funds he bought into last year, catching up on his IRA, and even whipped out an investment book in the middle of our conversation and started showing me data on the performance of stocks versus commodities and bonds over the last 200 years.

Martin countered that while investing nuts like myself and now Mike might make some money at it, we’ll be spending our time on it, too. It was a good point. I started to talk about how I don’t really spend that much time, but then Mike had the perfect answer:

Right now, the only thing making me money is my work. But in 20 years, my money will be making me money. Do you really want to have to rely on your work to make you money indefinitely? What if you’re doing that 20 years down the road and you break your right arm? What will support you then? What about when you’re just too old to work?

I absolutely love that line of reasoning. I agree that while your net worth is low, it doesn’t make sense to spend too much time on investing. I’d probably have more time if I’d just bought an index fund and took all of the time I spent investing and spent it working instead. For me, it is something of a hobby. Still, once you have enough money, it really is worth a significant chunk of your time. Think of it this way: how much time do most people spend comparison shopping for things like computers or TVs? How much money will that save them? Then ask yourself how much their entire retirement savings is worth, and how much it’s worth to plan it effectively.