One of the habits of the wealthy we discussed last week is their tendency to get a jump-start on their day by waking early in the morning. They often live by the old saying: Early to bed, early to rise, makes a man healthy, wealthy and wise. Indeed, surveys have shown that high net worth individuals awake on average two or three hours before they need to, so that they can incubate ideas about what they need to do to grow their wealth.

This point seems to be borne out by the actor/rapper Will Smith, whose net worth is an estimated US$350 million, in a recent interview with The New York Times. The 52-year-old Smith revealed that he gets up at 4:00 am to read or meditate on “ideas that I want to put into the world”.

We know Bill Gates, the former CEO of Microsoft, too, reportedly starts his day early, going on the treadmill, then reading through The New York Times, The Wall Street Journal and The Economist. Elon Musk wakes before 7:00 each morning then reads his critical emails before heading to the office. And, Warren Buffett rises at 6:46 in the morning after getting eight hours of sleep, before kick-starting his work day.

But it’s not simply the act of waking up early that will provide one of the building blocks of financial success. What if you work late and are therefore not an early riser? Surely, this should not determine whether or not you are able to build wealth. Because, while the early hours of the day are optimal for the brain’s efficiency, you can always carve out another time of day, maybe after a power nap in the afternoon, when you can sit and contemplate what your intentions are and how you will manifest them.

The bigger issue here is really one of time management. The wealthy, it turns out, are very intentional with their time, leading structured lives that can assist them in capitalising on opportunities to grow their wealth. They don’t stumble around from one day to the next, haphazardly living their lives, and hoping they will be able to take care of themselves in the future.

How can procrastination affect your financial well-being?

Procrastination, as the saying goes, is the thief of time. It is also a thief of your money, an enemy of wealth, and a big reason why you are struggling with your finances and, believe it or not, why you are often blocked on your path to financial freedom.

Take the following two scenarios you could be presented with: 1. You can go online to a celebrity gossip site to get the skinny on the scandal of the century that’s trending on all the social media sites then call a friend to dissect the suss. Or 2. You can sit down and finally draft a financial mission statement and financial plan that you’ve been meaning to get around to, which would articulate the steps you’re planning to take to achieve financial success, and without which you’ve only been spending haphazardly and digging further into credit card debt.

Which option would you pick?

No, honestly.

It perhaps shouldn’t surprise you if your natural inclination is to pick option 1. Low-hanging fruit. The fact is, as experts point out, the act of procrastination is associated with immediate gratification. Investing time in a celebrity’s problems offers a perverse satisfaction, as it tells us that the rich often have messed-up lives like you. Option 2, on the other hand, can nevertheless affect your financial future positively in the future. But it is an often laborious, time-consuming activity. But who has time for that? We have become a society that values instant gratification over discipline and sacrifice.

The time value of money

Understanding the importance of not procrastinating as it pertains to financial matters comes as a result of understanding the time value of money. But what is the time value of money? The time value of money purports that, all things being equal, money is more valuable in the present than in the future. Sorting your money issues now — meaning, the sooner you’re out of debt and investing — allows you to use that money to create future value. This is as a result of the principle of compounding. Which is to say, the money you earn from your investments now can be reinvested in order to earn even more. The longer you put off making a plan to save more and consume less, the more you put off opportunities for potential returns you could have otherwise earned.

Say you had the choice of either getting $100,000 now or receiving the same amount in five years’ time. The better choice would be to take the money now and invest it now. Rather than starting from ground zero in five years when that money could have already earned five years’ worth of interest.

The saying time is money means time is what allows your money to earn more. Don’t waste it in 2022.