Time Value of Money (Investments & Retirement) - Definition, Examples, Advice | Bolder Money

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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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