Time Value of Money
- Time Value Tables
- Introducing the HP12C
- Tricks to Watch out for
Watch Out For
When dealing with financial products, discuss the
products in finance terms. What is the cost? What are the terms of the
contract? What is the rate you are receiving or paying? Does cash exchange
hands upfront or at the end? Can rates and terms change? Watch out when
companies sell the payment amount; i.e. the monthly car payment, the copier
lease payment, the monthly mortgage payment, your monthly annuity payment.
Stop here! This is one of the techniques used by companies to avoid
disclosing the true costs. Remember “the devil is in the details.” By
selling products using rate factors or absolute payments, true financing
costs are subtly built into the purchase price. The salesperson is selling
the affordability of the payment and not the cost of the product. That can
also work in your favor; my point, is that understanding Time Value concepts
can help one make sound decisions.
When dealing with money and
investing, thoroughly understanding the time value of money is a must know
topic. There’s a huge benefit from starting to invest early in life; try
not to miss the opportunity. There are ways to catch up, but building assets
gets harder as time passes.