![]() ![]() Is this investment decision really wise? Are you better off saving your money where it is? Because most investment decisions are risky, it pays to double check. You might ask yourself a lot more questions when facing several investment options. How much is your money today compared to money you might make tomorrow? This is the fundamental question that present value answers. It is often defined in contrast to future value, the amount you would have made over time when investing. Present value is a term in accounting used to describe the value of future returns in today’s money. To determine whether your future investments are worth it, you must compare them to your money’s present value. You shouldn’t chase opportunities that aren’t worth the money you have today. Sometimes what seems like a good deal might not be such a bargain after all.Īs the saying goes, a bird in the hand is worth two in the bush. But not all of life’s risks are worth betting your money on. Even if we take on losses, we can be assured that at least some of our profits are safe. Our key financial decisions involve making bold choices based on the risks we are best equipped to take. Indeed, we can even prepare for the worst of life’s curveballs. If all goes well, we can expect a fair amount of money after a definite span of time. For investments, we can make projections on how much we can make based on present numbers. Though it’s impossible to know what the future may hold, we can expect what it might be. ![]() When people invest, they look to the future. Guide published by Jose Abuyuan on November 13, 2020 Measuring Your True Gains Through Present Value ![]()
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