Time Matters

A dollar in ten years is not worth the same as a dollar now. Even ignoring inflation. A dollar in ten years doesn’t get the next decade. That is a huge disadvantage. This is if you are thinking of that dollar as a Productive Asset. Something that can get a job. Something that generates an income. A Discount Rate is how much you should discount valuing that dollar, if you wanted to compare its financial value to money today. Interest/Return is the salary money gets. Discount Rate thinks in reverse. It is the salary needed to grow money. It allows you to work out what the Present Value of a stream of income is. Time Value of Money is a useful idea. It is a reminder that the job money does, matters. A dollar may be worth the same (ignoring inflation) if you put it under your bed for ten years, but that is just because it is being lazy. Not taking advantage of its advantage. Productive things grow with reinvestment. Sustainable Growth means there is more to go around tomorrow. What we do, matters.

1525 Joachimsthaler of the Kingdom of Bohemia 

was the first thaler (dollar)