Can You Explain the Time Value of Money Concept? (2)

The time value of money is a fundamental and very important concept of personal finance. In fact, it can help individuals make better spending, savings, and investment decisions. In fact, the time value of money essentially means that having one thousand dollars today is worth more than having one thousand dollars in the future. Here's an example of how the time value of money can work for you. Taking that one thousand dollars and investing it and earning five percent over time means that that money will grow. That is beneficial to you. An example of the time value of money working against you would be that one thousand dollars that you have today will not buy one thousand dollars worth of goods twenty years from now. So it's important to understand that it's not about trying to time the market, meaning it's not about trying to determine the best time to be in the market. It's really about the time in the market so that you can have your money working for you.