Stop Wasting Time and Money! A Harvard Economist's Guide to Better Decisions with Daniel Altman

Daniel Altman emphasizes that applying economic principles provides a practical framework for everyday financial decisions, from shopping habits to major purchases. He argues that understanding the economic value of time, and acknowledging asymmetries in financial transactions, can empower individuals to make smarter, more fulfilling choices with their money and hours.

Valuing Your Time in Dollars Helps Decide When Spending to Save Time Is Worthwhile

Altman stresses the importance of knowing your hourly value to avoid wasting time on low-value tasks. He explains that evaluating your time in dollar terms clarifies when it’s not worthwhile to spend hours disputing a minor charge or doing activities others can handle for less than the value you could generate in that period.

He gives the example of spending hours on hold to reclaim $10 or $20 from a company—if your time is worth more, it’s often best to simply move on. Similarly, if you’re engaged in a side hustle or freelance work, you can measure the money you’d earn in an hour and use that as your baseline. For activities not directly tied to income, like sleep, Altman recommends asking yourself how much you’d pay for an extra hour, which can help assign value to time spent on rest or leisure.

To make practical choices, Altman suggests using this framework to determine which tasks to outsource. If you could earn $50 an hour, but ironing shirts would cost you $5 at the dry cleaner, it clearly makes sense to delegate that task. The aim is to compare the time and money spent against the value received, freeing up hours for higher-value pursuits. Altman offers an online quiz at his website to help calculate personal time value, noting that this figure can fluctuate throughout the day depending on alternatives like leisure or productivity.

Optimize Purchases and Shopping Habits For Time and Money Savings

Supermarket trips present an opportunity to apply economic thinking. Altman advises shopping during delivery days—such as Wednesdays or Saturdays—when produce and meats are freshest, ensuring you can get everything you need in one trip. Shopping during off-peak hours also leads to faster checkout and less time spent in aisles.

He notes that saving even thirty minutes each week at the supermarket adds up to about twenty-five hours a year, effectively gaining a full day back. Avoiding spoiled products also saves around $250 annually, a meaningful sum amid rising costs.

When considering grocery delivery apps or services like Instacart, Altman explains the importance of weighing the convenience fee or hidden costs against your time’s value. If an app saves you significant time you could use for higher-value work or essential rest, the fees may be justified. However, this varies by individual circumstances and the actual value you derive from the saved time.

Choosing Assets vs. Shared Services: Ownership Costs vs. Usage-Based Alternatives

Altman explores the economics of vehicle ownership in an era shifting towards shared, usage-based alternatives such as self-driving rideshares. Traditional car ownership carries high costs due to cars sitting idle, but self-driving fleets operating constantly could bring ride prices down to a tenth of current levels.

He suggests reconsidering major purchases by comparing long-term obligations of ownership against rapidly evolving, cost-reducing technologies, like ubiquitous Waymo or Uber rides. For many peop ...

Heather Monahan and Daniel Altman discuss how common cognitive traps, like the sunk cost fallacy and analysis paralysis, hinder timely, rational decisions, and they explore practical frameworks for moving forward with less regret and more confidence.

Sunk Cost Fallacy Traps People Into Continuing Poor Investments

Releasing Emotional Attachment to Past Investments for Forward-Focused Decisions

Daniel Altman explains that the sunk cost fallacy is when individuals struggle to abandon a project, relationship, or investment simply because they have already devoted significant resources to it, even though those resources are now irretrievable. He stresses that sunk costs—money, time, or effort already spent—are in the past and cannot be recovered. Therefore, decisions should focus on future outcomes rather than emotional attachments to what has already been lost. Heather Monahan relates to this, admitting that holding onto sunk costs in jobs or relationships only deepened her difficulties, and embracing the idea of letting go helps pave the way for better decisions.

Keeping a Stake in Abandoned Projects Satisfies the Emotional Need to Avoid Regret While Allowing Progress Toward Better Alternatives

Altman acknowledges that regret over abandoned investments is real. He offers a strategy: retaining a small stake in an old project or investment, such as selling only part of a stock holding, can help mitigate regret if things improve later. By keeping a "toe in" the past investment, people can step forward toward better opportunities while still satisfying some emotional need for closure or for not missing out entirely.

Analysis Paralysis and Perfectionism Delay Decisions Through Refinement and Comparison Cycles

Perfect vs. Good: Choosing Progress Over Indecision

Altman describes analysis paralysis, where an overabundance of options or the pursuit of “the perfect choice” freezes action. He recounts a friend who spent years perfecting smartphone games rather than releasing more, simpler products. The friend’s desire for perfection meant missed opportunities and prolonged effort with little reward. Altman warns against letting perfectionism override the value of good-enough decisions, emphasizing that steady progress and shipping workable products is more effective than endless refinement.

Thresholds for Timely Market Decisions Without Sacrificing Quality

To overcome endless comparison, Altman references a decision-making framework from economics, specifically in the context of searching for a new home. Instead of looking endlessly for a perfect fit (one couple viewed 99 houses), he suggests learning from the market early on and then committing to the next option that’s better than everything previously seen. This structured “threshold” approach narrows choice and ensures that waiting for perfection doesn't lead to loss of ...

Daniel Altman and Heather Monahan discuss the realities of career transitions, emphasizing the importance of gradual change, continuous education, and investment in emerging skills like AI to maintain professional relevance.

Strategic Career Shifts Need Gradual Progress, Not Abrupt Changes

Career Pivots: Building Credibility Through Adjacent Steps

Altman explains that career changes rarely occur in a single step and usually require a series of adjacent moves. He shares personal experience, describing how even after earning a doctorate and having job offers to become a professor, he sought more impactful ways to use economic tools. This led him to transition across fields like journalism and sports by applying his core expertise in new contexts. He advises those wishing to shift industries–for example, moving from finance to sports–to seek roles that bridge the gap, such as working on sports club financing, moving into commercial operations, and finally to sporting operations. Each move builds credibility and relevant experience, inching closer to the target role while expanding networks within the desired industry. Altman emphasizes being patient and strategic, making connected moves instead of expecting drastic leaps.

Investing In Education Prevents Limiting Specialization

Exploring New Passions and Capabilities Through Community College, Internships, and Unfamiliar Industries

Altman believes people frequently underinvest in their education and exposure to new industries, often assuming that formal schooling or standard on-the-job experiences are sufficient. He suggests regularly exploring interests by auditing courses at community colleges, connecting with local research institutes, or engaging in quick internships. For those looking to switch fields, he encourages taking opportunities to witness behind-the-scenes operations or trying out different roles, which expands understanding, uncovers new interests, and keeps skills applicable across industries.

Formal Education Ends, but Continuous Learning Is Essential

He cautions against the belief that education ends with college, underscoring the value of ongoing learning long after formal schooling is complete. Altman encourages professionals to actively seek new experiences and skills through both formal and informal channels, ensuring continued growth and adaptability in a changing job market.

Ai Courses and Tech Tool Learning Keep Professionals Relevant Amid Industry Changes

Approaching Ai As a Tool to En ...

Current economic conditions are being shaped by heavy borrowing from both governments and corporations, driven largely by the need to expand AI infrastructure and data centers. This surge in borrowing is pushing interest rates to their highest levels in two decades, creating ripple effects across credit markets, budgets, and investment strategies worldwide.

Credit Markets Pressured As Borrowing Drives Interest Rates To 20-year Highs

A significant amount of borrowing is taking place globally, not only among governments but also within the corporate sector. Seven major economies are now bearing especially large debt burdens, spurred by the costly expansion of physical capital and AI infrastructure. As companies and countries pursue long-term investments with uncertain returns, credit markets are forced to offer higher interest rates to attract lenders. This has led to some of the highest interest rates seen in the last 20 years.

Seven Major Economies Face Unsustainable Debt Financing Huge AI Infrastructure and Equipment Expansion

The enormous amount of debt taken on by these countries is largely funneling into AI and technology-related capital expenditures. The returns on these investments remain uncertain, which compounds the risk for lenders and raises the overall cost of borrowing.

Rising Credit Rates Compel Borrowers to Offer Attractive Returns, Increasing Mortgage, Credit Card, and Business Financing Costs

The increase in interest rates means the cost of borrowing has gone up for everyone. This translates into more expensive mortgages, credit card payments, and business loans. The higher the rate, the higher the monthly obligations, and these costs are felt directly by consumers and businesses alike.

Financial Pressures to Affect Budgets, Profitability, and Prices Long-Term

These rising interest payments will have lingering effects on financial planning for households, companies, and governments.

Interest Payments Cut Funds For Governments, Shrinking Services and Stimulus

Governments facing higher interest payments on debt must reduce spending on other areas. This means slimmer budgets for services and less fiscal stimulus, with fewer funds filtering down to state and local levels.

Companies May Raise Prices to Offset Higher Borrowing Costs, Increasing Inflationary Pressure on Consumer Purchasing Power

With higher interest making debt more expensive, companies may raise prices on products and services to maintain profitability. This puts additional inflationary pressure on consumer purchasing power, as everyday goods become costlier.

Ai Infrastructure Investment Failures May Lead To Declining Stock Prices or Reduced Dividends

If these significant investments in AI infrastructure do not yield expected returns, the result could be declining stock prices or reduced dividends for shareholders. The stakes are high for both investors and companies betting on rapid innovation.

Current Economic Climate Differs From 2008 Crisis; Lacks Hidden Leverage, Resembles European Debt Issues

Today’s environment, marked by elevated stock valuations, rising interest rates, and increased debt, does not harbor the kind of hidden derivative risks seen in the 2008 financial crisis. Instead, it bears greater resemblance to the debt sustainability issues that have troubled some European countries.

Today's Market Pressure: Stock Valuations, Interest Rates, Debt, but No Hidden Derivatives Bomb

Unlike 2008, there is no hidden derivatives bomb threatening to destabilize the financial system. However, market pressure is significant, focused on stock prices, elevated interest rates, and large ...

Daniel Altman and Heather Monahan discuss the growing importance of prioritizing well-being and work-life balance to achieve lasting success, drawing on examples from business, research, and personal decision-making.

Career Success and Wealth Don't Require Sacrificing Balance and Happiness, Contrary to Silicon Valley's Exhaustive Work Culture

Successful Entrepreneurs Like Paul English Maintain Nine-To-five Workdays, Balancing Work and Life While Building Billion-Dollar Companies, Contradicting the Myth That Extreme Hours Create Wealth

Daniel Altman describes Paul English, co-founder of Kayak, who operates from Boston and openly rejects the Silicon Valley "hardcore" or "nine nine six" work culture—working from 9 a.m. to 9 p.m., six days a week—popularized in China and embraced in some American tech circles. Paul English believes that building wealth and maintaining a high quality of life are not mutually exclusive. He prioritizes his employees’ well-being and paychecks, aiming to get the most out of his employees by supporting both their professional success and happiness. English's approach defies the notion that extreme work hours are necessary for success; the achievements of his companies directly contradict the myth that exhaustion leads to wealth.

Rejecting Nine-To-six Work Cultures Retains Talented Employees While Maintaining Well-Being

Unlike CEOs who expect employees to endure unhappiness in exchange for greater pay, English works to create an environment where happiness and success go hand in hand. This approach not only retains talented employees but reinforces company well-being and effectiveness.

Research Shows a Link Between Employee Happiness, Workplace Satisfaction, Profitability, and Stock Performance

Daniel Altman notes studies by economists correlating employee workplace reviews, such as those on Glassdoor, with future stock performance. Though it’s necessary to adjust for many factors that might affect profitability, economists use advanced statistical tools to show that higher employee happiness and satisfaction predict better future stock returns, outpacing companies with poor workplace cultures. This evidence further undermines the Silicon Valley mindset that misery is a byproduct of success.

Higher Employee Satisfaction Predicts Better Future Stock Returns Than Poor Workplace Cultures

Employee Well-Being Drives Competitive Advantage and Success

Altman emphasizes that employee well-being is a genuine driver of competitive advantage and corporate success, offering measurable benefits both for the people directly involved and company profitability.

Understanding Group Preferences: Avoiding Assumptions for Better Outcomes

Economist Reversed Decision on New Job After Wife's Objection to Move

Decision-Making: Directly Communicate Preferences to Avoid Costly Misunderstandings and Assumptions

Altman shares the story of a star macroeconomist lured with an attractive offer from another university, which he initially accepted. However, he soon reversed the decision, choosing to stay at Harvard. The misstep arose because both the economist and his wife assumed the other preferred the move, when in reality neither wanted to go. This example highlights the potential pitfalls of excessive altruism: making decisions on behalf of a group without clearly communicating and understanding the group's individual preferences.

Altman stresses that effective decision-making for a group (be it a family or a workplace team) depends on accurately ...