RescueTime: Free Time-Management Software

How much time do you spend blogging?" people often ask me.

"I don't know," I say. "A lot. Probably forty to sixty hours a week." I've always wished I could provide a better answer to that question. Now I can.

During his recent "fireside chat" with Google, Tim Ferriss mentioned a new application he's been using called RescueTime. He didn't elaborate, only mentioning it in an off-hand sort of way, but I was intrigued.

It turns out that RescueTime is a tool to measure how you're spending your time on the computer. It's simple to use. To get started you simply:

• Download and install a small application on your local computer(s).
• Establish an account at the RescueTime web site.
• Work as normal.

RescueTime works in the background, tracking the applications you use and the web sites you visit. Every twenty minutes, it sends this information to the web. Whenever you're curious, you can visit the RescueTime dashboard to find out how you've been spending your time. For example, here's a pair of graphs taken near the end of my first day using the software:

Yesterday I spend nine hours and nine minutes on the computer. That's too much. But that's also the point — I didn't have a good sense for how long I spent online. RescueTime gives me concrete information about my productivity.

RescueTime also provides a chart of my most-frequenlty used apps and sites. Yesterday, I spent about 3-1/2 hours in BBEdit, my text editor, most of which was spent on the Robert Kiyosaki piece. I also spent an hour answering e-mail, and an hour handling miscellaneous tasks at Get Rich Slowly. More data is available in other reports.

RescueTime encourages users to "tag" each site or application with terms such as "work, personal, writing, goofing around" and so on. After you've tagged an item, you can set goals and alerts. You might, for example, set a goal to spend less than an hour a day reading blogs. Or maybe you want to spend at least four hours a day on work-related projects.

I'm only just beginning to use RescueTime, but I love it. It has the potential to revolutionize the way I work. Just knowing how much time I'm spending at various sites and tasks makes a difference.

Personal Currencies: New Ways to Look at Money

On Saturday, I wrote about my transition from spender to saver. I mentioned that I'd recently peeked at the latest camera equipment. "I spent twenty minutes on Amazon, drooling over the Nikon D300," I wrote. "I'm tempted — but not much. I'd rather save that $1,800 for the future."

Reader Kristi Wachter left an astute comment:

$1800? That's, what, 6% of a Mini Cooper?

This is an excellent way to look at proposed expenses: re-frame the purchase in terms of something you already value. I've already spent several months coveting a Mini Cooper. By looking at the new camera in terms of how much Mini it would cost me — 6%! — I get a better idea of the sacrifice I'd have to make to buy it. It makes the idea more concrete. In a way, the Mini Cooper has become a sort of personal currency.

Money is an abstract concept. It really represents time and labor, and those are hard to visualize. By finding something concrete to use as a measure of value instead, it's easier to visualize how much something is really worth to you.

For example, my wife sometimes measures things in lattés. If she sees something in a store, she'll stop and consider: "That vase is three lattes" or "Those shoes are ten lattés" or "That book is two lattés". By looking at things in this way, she's able to figure out how much they're actually worth.

Our friend Marla measures things in Saturns. She loves her car (a Saturn, naturally), and so whenever somebody mentions something expensive, she's able to compute its value to her. A fancy plasma TV might be one-fifth of a Saturn, for example. A house might be ten or twenty Saturns.

Last night at dinner, I mentioned this notion to our friends Mike and Rhonda. "Oh, we used to do that all the time," Rhonda said. "When we were first married, we lived near a sushi place. We loved their rainbow rolls, but they were kind of expensive. Whenever we got paid, we'd convert the dollars to rainbow rolls."

Obviously these sort of personal currencies aren't sophisticated financial tools. They are, however, quick and easy ways for each of us to measure the relative value of the things we buy.

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Warren Buffett on Market Fluctuations: Investors Gain When the Market Falls

Berkshire Hathaway held its annual shareholders meeting over the weekend. The company, run by Charlie Munger and Warren Buffett (the world's richest man, and one of my personal heroes), continues to do well, though Buffett warned shareholders not to expect continued stellar returns as in years gone by. "Anyone that expects us to come close to replicating the past should sell their stock," Buffett said. "It isn't going to happen. I think we're going to get decent results over time, but we're not going to get indecent results."

I had a chance to attend this year's gathering, which drew around 31,000 people to Omaha, Nebraska. I'm not a Berkshire Hathaway shareholder, but I had access to a ticket. Ultimately, I didn't have time, and it was difficult to justify the cost. Instead, I spent part of the weekend reading some of Warren Buffett's annual letters to shareholders, for which he is well-known. Though these letters include plenty of numbers, they're interspersed with practical investment advice, astute observations on the economy, and lots of folksy humor. His 1997 letter contains some advice appropriate to our current volatile market.

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.

That's the portion of the letter that is most often quoted. But I think the next few paragraphs are just as interesting because they demonstrate how he puts this philosophy into practice.

For shareholders of Berkshire who do not expect to sell, the choice is even clearer. To begin with, our owners are automatically saving even if they spend every dime they personally earn: Berkshire "saves" for them by retaining all earnings, thereafter using these savings to purchase businesses and securities. Clearly, the more cheaply we make these buys, the more profitable our owners' indirect savings program will be.

Furthermore, through Berkshire you own major positions in companies that consistently repurchase their shares. The benefits that these programs supply us grow as prices fall: When stock prices are low, the funds that an investee spends on repurchases increase our ownership of that company by a greater amount than is the case when prices are higher. For example, the repurchases that Coca-Cola, The Washington Post and Wells Fargo made in past years at very low prices benefitted Berkshire far more than do today's repurchases, made at loftier prices.

At the end of every year, about 97% of Berkshire's shares are held by the same investors who owned them at the start of the year. That makes them savers. They should therefore rejoice when markets decline and allow both us and our investees to deploy funds more advantageously.

So smile when you read a headline that says "Investors lose as market falls." Edit it in your mind to "Disinvestors lose as market falls — but investors gain." Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other. (As they say in golf matches: "Every putt makes someone happy.")

It's sensible advice, but so easy to forget when you see the value of your invetments plummeting. And this is just one part of one shareholder letter. I still have more than twenty others left to read!

Though I didn't have the time to make the pilgrimage to Omaha this year, the opportunity may present itself in the future. I hope so. I think it'd be a kick to attend this "Woodstock for capitalists", which apparently includes an exhibit hall filled with vendors from the companies Berkshire Hathaway owns.

[Warren Buffett's annual letters to shareholders]

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