Bill Gates & Warren Buffett: Time vs Money

If you frequent LinkedIn, you’ve probably seen a few of your connections share this video in the last couple of months.

Bill Gates talks about how amazed he was to see Warren Buffett’s weekly calendar. The surprise: It’s almost empty. There are entire weeks where he might only have one upcoming meeting written down. Buffett’s reasoning? He doesn’t want to waste his time being busy. “Time is the only thing you can’t buy,” Warren Buffett explains. “I mean, I can buy anything I want, basically, but I can’t buy time. I’d better be careful with it. There’s no way I can buy more time. ”Time is precious for business owners and CEOs. In the world of cash flow, one thing that stands out is the psychology of: When do we choose to sacrifice money for time, and when are we not? For example, a startup may sacrifice 20-50% of its equity to a VC or an angel investor because they need to spend to hire people and don’t have the time to wait. Better to own a smaller percentage of a growing business than 100% of one that’s stagnated or out of business. Another example is a business that takes out a loan because they don’t have 6-months or a year to save up the money for new projects. If they wait a year, the time may have passed where that project would have made the biggest impact. It’s a complex balancing act. When a solution invoice factoring comes into play we see a shift in psychology. The question of saving time vs. money is replaced with loss aversion hesitance, which sounds something like this: “My customer signed a contract and said they would pay their $30k invoice in 60 days. I wish they would pay faster, but that’s the cost of doing business with customers bigger than we are. They dictate the terms ”The factoring company is offering them a faster way to get paid. The result is something like $25,000-27,000 of the $30,000 invoice advanced within 48 hours, with the rest received once the invoice is paid. But the business will think, “Yeah, but I’m missing out on the full value of the contract. I’ll just wait. ”The question then: Is it worth the wait? What goes on hold during those 60 days?

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