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It’s a subtle point, but it’s backwards. Money is worth more NOW so you can spend it to acquire skills, resources, and goods. If you wait then you are living l

It’s a subtle point, but it’s backwards. Money is worth more NOW so you can spend it to acquire skills, resources, and goods. If you wait then you are living life without those things. And delaying early strategic wins. Passive investing is renting out that optionality to other people, like starting a 401k early.

scarface_74 2y ago
Money is worth more now because it can be invested and grow in the future instead of getting more money in the future that is worth less because you have to take into account either inflation or what the money could have made even if you are just looking at the risk free returns - ie discounted cash flows
- liontwist 2y ago
  > Money is worth more now because it can be invested and grow in the future This is circular. Why would money magically get more valuable in the future? Money is valuable for its uses, not intrinsically. The reason why you can get interest on money is because people and businesses need it NOW to do productive things, more badly than in the future. This is the entire principle behind discounting cash flows.
  - scarface_74 2y ago
    The same amount of money is worth less in the future than it is in the present because it can grow even at a risk free rate. Yes, I need some of my money now to pay my expenses. But if you had 200K extra to invest in 2010 and chose to invest it and instead chose to work somewhere paying $200K less than you could have thinking I can make $200K more in 14 years. You would have lost out on 605% returns.
    - liontwist 2y ago
      Ill repeat: > Money is valuable for its uses, not intrinsically. Investing in it’s truest form is consuming money to make entirely new goods and services. To put it one more way. If the treasury was paying zero percent forever. Would there still be time value of money? Absolutely.
      - scarface_74 2y ago
        https://www.investopedia.com/terms/t/timevalueofmoney.asp https://www.investopedia.com/terms/t/timevalueofmoney.asp What do you think you are doing when you “invest” in the stock market? Yes I know when you buy stocks aside from the IPO or secondary offering you’re buying from other people and the company doesn’t get the money directly.
        liontwist 2y ago
        What do you think the business is doing with your money when you buy stocks and bonds? They spend it to accomplish a goal. The ability to accomplish that goal now is more valuable than the cash.
        scarface_74 2y ago
        And? The value of the money to you or the business is worth more now than 10 years from now. Meaning just like I said, it makes more sense for you as an individual to have made $300K and live off $100K and invest it in 2010 than to wallow in obscurity at failing startups and then start saving at 35. This is the textbook definition of the time value of money - as quoted from Investopedia.
        liontwist 2y ago
        I have one other way to describe this line of reasoning: - money is more valuable now because you can start earning interest - but why are others willing to pay interest? - because the money is more valuable to them now
        hardwaresofton 2y ago

scarface_74 2y ago

Money is worth more now because it can be invested and grow in the future instead of getting more money in the future that is worth less because you have to take into account either inflation or what the money could have made even if you are just looking at the risk free returns - ie discounted cash flows

liontwist 2y ago
> Money is worth more now because it can be invested and grow in the future This is circular. Why would money magically get more valuable in the future? Money is valuable for its uses, not intrinsically. The reason why you can get interest on money is because people and businesses need it NOW to do productive things, more badly than in the future. This is the entire principle behind discounting cash flows.
- scarface_74 2y ago
  The same amount of money is worth less in the future than it is in the present because it can grow even at a risk free rate. Yes, I need some of my money now to pay my expenses. But if you had 200K extra to invest in 2010 and chose to invest it and instead chose to work somewhere paying $200K less than you could have thinking I can make $200K more in 14 years. You would have lost out on 605% returns.
  - liontwist 2y ago
    Ill repeat: > Money is valuable for its uses, not intrinsically. Investing in it’s truest form is consuming money to make entirely new goods and services. To put it one more way. If the treasury was paying zero percent forever. Would there still be time value of money? Absolutely.
    - scarface_74 2y ago
      https://www.investopedia.com/terms/t/timevalueofmoney.asp https://www.investopedia.com/terms/t/timevalueofmoney.asp What do you think you are doing when you “invest” in the stock market? Yes I know when you buy stocks aside from the IPO or secondary offering you’re buying from other people and the company doesn’t get the money directly.
      - liontwist 2y ago
        What do you think the business is doing with your money when you buy stocks and bonds? They spend it to accomplish a goal. The ability to accomplish that goal now is more valuable than the cash.
        scarface_74 2y ago
        And? The value of the money to you or the business is worth more now than 10 years from now. Meaning just like I said, it makes more sense for you as an individual to have made $300K and live off $100K and invest it in 2010 than to wallow in obscurity at failing startups and then start saving at 35. This is the textbook definition of the time value of money - as quoted from Investopedia.
        liontwist 2y ago
        I have one other way to describe this line of reasoning: - money is more valuable now because you can start earning interest - but why are others willing to pay interest? - because the money is more valuable to them now
        hardwaresofton 2y ago