Definition: Time Value of Money - Examples & Advice | Bolder Money

401K Matching 401K Matching

529 Plan 529 Plan

Annuity Annuity

Asset Allocation Asset Allocation

Asset Class Asset Class

Asset Management Asset Management

Automated Investing Tools Automated Investing Tools

Backdoor Roth IRA Tax Handling Backdoor Roth IRA Tax Handling

Basis Point Basis Point

Bear Market Bear Market

Blockchain Blockchain

Blue Chip Stock Blue Chip Stock

Bond Yield Bond Yield

Book Value Book Value

Break-Even Analysis Break-Even Analysis

Bull Market Bull Market

Buy-and-Hold Strategy Buy-and-Hold Strategy

Capital Expenditure Capital Expenditure

Capital Investment Capital Investment

Capital Preservation Capital Preservation

Cash Dividend Cash Dividend

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Compound Interest Compound Interest

Consumer Price Index (CPI)Consumer Price Index (CPI)

Convertible Bonds Convertible Bonds

Corporate Bond Corporate Bond

Cost Basis Cost Basis

Cost-Benefit Analysis Cost-Benefit Analysis

Credit Default Swap (CDS)Credit Default Swap (CDS)

Cryptocurrency Cryptocurrency

Debt-to-Equity Ratio Debt-to-Equity Ratio

Diversification Diversification

Dividend Dividend

Dividend Reinvestment Plan (DRIP)Dividend Reinvestment Plan (DRIP)

Dollar-Cost Averaging Dollar-Cost Averaging

Exchange-Traded Fund (ETF)Exchange-Traded Fund (ETF)

Federal Reserve Rate Federal Reserve Rate

Fiduciary Fiduciary

Financial Freedom Financial Freedom

Financial Leverage Financial Leverage

Fixed-Income Investment Fixed-Income Investment

Fractional Shares Fractional Shares

Fund Manager Fund Manager

Generational Wealth Generational Wealth

Growth Stock Growth Stock

Hedge Fund Hedge Fund

Index Fund Index Fund

Initial Public Offering (IPO)Initial Public Offering (IPO)

Installment Sale Installment Sale

Interest Coverage Ratio Interest Coverage Ratio

Internal Rate of Return (IRR)Internal Rate of Return (IRR)

Investment Grade Investment Grade

Investment Portfolio Investment Portfolio

Investment Risk Investment Risk

Leverage Leverage

Leverage Ratio Leverage Ratio

Liquid Asset Liquid Asset

Liquidity Ratio Liquidity Ratio

Margin Account Margin Account

Margin Call Margin Call

Market Capitalization Market Capitalization

Market Order Market Order

Maturity Date Maturity Date

Money Market Fund Money Market Fund

Money Multiplier Money Multiplier

Multiple Streams of Income Multiple Streams of Income

Mutual Fund Mutual Fund

Net Profit Margin Net Profit Margin

Net Worth Net Worth

Nominal Interest Rate Nominal Interest Rate

Opportunity Cost Opportunity Cost

Over-the-Counter (OTC)Over-the-Counter (OTC)

Par Value Par Value

Passive Income Passive Income

Pension Pension

Preferred Stock Preferred Stock

Price Discovery Price Discovery

Return on Assets (ROA)Return on Assets (ROA)

Return on Equity (ROE)Return on Equity (ROE)

Return on Investment (ROI)Return on Investment (ROI)

Risk Tolerance Risk Tolerance

Robo-Advisor Robo-Advisor

Rollover IRA Rollover IRA

Roth Conversion Roth Conversion

Roth IRA Roth IRA

SEP IRA SEP IRA

Securities Securities

Semi-Retirement Plan Semi-Retirement Plan

Shareholder Shareholder

Short Position Short Position

Simple IRA Simple IRA

Small Cap Stock Small Cap Stock

Socially Responsible Investing (SRI)Socially Responsible Investing (SRI)

Solo 401k Solo 401k

Definition

The concept that money available now is worth more than the same amount in the future because of its earning potential.

What to consider

Remember that money now is worth more than the same amount later.
Start saving and investing as early as possible.
Consider this principle when planning for future expenses.

Real world scenarios

Mary invests a windfall sooner rather than holding it in a no-interest account, capitalizing on potential growth over time.
Ajay weighs taking a lump sum now versus smaller installments spread out. He recognizes a dollar today can earn returns faster.
Starting to save for retirement in her 20s, Camila harnesses compounding benefits that far outweigh late-start contributions.

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