You have most likely heard of the phrase: “Time Is Money”.
But how about the concept: time value of money?
Time value of money (TVM) is one of the most basic concepts in finance and investing.
It is taught in one of the first few lessons of Finance 101 courses since much of investing is built on this theory.
The underlying concept of TVM is that one dollar today is worth more than one dollar in the future. And arguably, this is a fairly intuitive idea.
In fact, when we talk about TVM, the word ‘inflation’ might have popped into your mind. However, inflation is only one of the reasons behind this idea…
Why Is $1 Worth More Today Than Tomorrow? Inflation Source: Agah GroupI remember how a plate of noodles only cost 40 cents when I was in primary school!
But we’ll be hard-pressed to find such
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