Got a Little Older, Got a Little Wieser

You hear it all the time: “Something weird happens to you when you turn 30.” Life gets a bit more serious, namely career changes, concerns about retirement, and passing out well before midnight. The term “settling down” takes over your mind.

This story does not apply to everyone. Being 30-year old today is much different from being a 30-year-old in the 1980s. However, my life certainly fits the mold provided by this narrative. Currently, I’m in my 30th year on this planet and I took this tale to task. I (finally) graduated college with my master’s, moved out to Omaha to embark on a new career, opened an official employer-based retirement account, and I can barely finish a whiskey ginger before 9:30 pm. What’s more, I moved to Omaha with my prospective wife, a squawking bird, and a new puppy. If that ain’t “settling down” then I don’t know what is…

Though many fear these drastic changes, especially when they are in their 20s, I welcome them with open arms. I’ve settled into my own skin. There is science to back this claim up! Our personalities seem to become much slower to change when we hit 30 and as the years go by, they get even slower.

However, I think the real change at 30 is not necessarily a result of our personalities stiffening, but of our finally understanding opportunity costs. Namely, that our time is valuable and valuable things are costly.

Alternative costs

When we reflect on the last 30 years of life, it’s easy to point out the abundant amount of time wasted–the past relationships, the multi-day parties and multi-day hangovers, the Netflix binges, and the frivolous spending. We notice how we opted to work more hours instead of spending time with our loved ones. On the other hand, we think about the times we should have been working but chose to sit in front of the TV and drink beer instead. We start to ponder the potential alternative uses of our time.

wieser-manThis concept of alternative uses of our time in economics is called “opportunity costs.” Austrian economist, Friedrich von Wieser, coined and defined alternative costs as the cost of our choices in terms of the opportunity of going without the next best choice.

We’ve talked about Austrian economists before here, here, and here. The underlying theme behind the Austrians is that value is subjective. Wieser’s definition doubles down on this because he doesn’t say “in terms of the opportunity of foregoing your next best-paid opportunity.” He says, ‘next best choice’. And, your next best choice is based on the eye of the beholder.

Wieser received plenty of criticisms over using alternative costs as a way to measure the costs of our choices, mainly because it is so hard to measure. On top of that, he furthered the idea of marginal utility, in that the value of things is not based on what it took to acquire them but on the satisfaction someone gains from an additional unit of that thing. The level of satisfaction we get from “things” are very different from person to person. For example, the value I get from the time spent reading economics textbooks probably differs substantially from other people.

Time is not merely money, it’s valuable

Though part of settling down could be a result of an aging personality trait, it’s more likely that we are just realizing opportunity costs. The costs involved with searching for the perfect partner or trying to figure out a career path become too high in terms of our next best option.

Instead of dealing with the uncertainty of who you’ll be with next year, you decide to eliminate the guesswork and put both of your incomes toward productive uses. Instead of hanging on a steep learning curve, you decide to settle in your career to increase stability and your ability to allocate your work hours toward the next best valuable option(s): your family, your hobbies, and yourself.  

When we hit the 30-year-mark in our lives, the notion of time being valuable becomes paramount in our way of thinking. We start thinking about our time in the future, so we actively choose to allocate funds from the immediate consumption of pizza and beer to our retirement investments.

 

Some of us wake up earlier because we find our time is more productive in the morning when our minds are fresh with little distractions. In the same vein, we go to bed earlier because we find sleeping to be more valuable than staying up for yet another episode. Relationships get better because you invest more time and energy into making them work. You end up stressing less about the small stuff and don’t give much air to relationship drama. You seem to find that the next best option is usually more valuable than worrying.  

Shall we just say that as we get older, we get Wieser?

 

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