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

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Asset Class Asset Class

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Dollar-Cost Averaging Dollar-Cost Averaging

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Federal Reserve Rate Federal Reserve Rate

Fiduciary Fiduciary

Financial Freedom Financial Freedom

Financial Leverage Financial Leverage

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Investment Grade Investment Grade

Investment Portfolio Investment Portfolio

Investment Risk Investment Risk

Leverage Leverage

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Money Market Fund Money Market Fund

Money Multiplier Money Multiplier

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Net Worth Net Worth

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

Par Value Par Value

Passive Income Passive Income

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Preferred Stock Preferred Stock

Price Discovery Price Discovery

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

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Risk Tolerance Risk Tolerance

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Shareholder Shareholder

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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.

Related terms

Investments & Retirement

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