Losing money with time

We all instinctively know that money loses value with time. Just imagine a situation – after a year of working you earned a bonus based on your performance. The company has offered you a choice – to receive the bonus with the next-month salary or to receive it now. What option would you choose? Most people would want to collect money as soon as possible and to start making use of it earlier. Bonus now for them is worth more than a bonus in a month, as they don’t want to wait. Who would want to wait to receive money earned with own work? If we have the bonus now, we know that we will benefit more from this amount than we would benefit if it were kept for the same month with the company. 

personal finance

The concept of Time Value of Money clearly shows why keeping all of your savings in cash will make you lose money over time. Future Value of your savings will be less if you keep it in cash than if you put it on deposit or invest in another way. Understanding and making use of this concept is vital if you want to build a financially secure future. 

0.00 avg. rating (0% score) - 0 votes