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4.1: Introduction

Last updated

Mar 13, 2025
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- 4: Time Value of Money
- 4.2: Liquidity- A Bridge Between Wealth and Choice

Anonymous
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Financial decisions are always about the future. No matter how much we analyze the outcomes of past decisions, the past is sunk—it can be studied and understood, but it can’t be changed. Instead, decisions are made for the future, a place full of uncertainty.

When we evaluate our options, we’re forced to speculate—not just about what will happen, but also about the value of what happens. Will the result be worth it? How much risk are we taking on? How might the passage of time change what we gain—or lose?

Time plays a dual role: it introduces uncertainty (risk) while also creating opportunities. And just as every opportunity comes with a cost, every financial choice comes with trade-offs. Understanding how time influences these decisions—and learning to measure its risks, opportunities, and costs—will help you make smarter financial choices in the future.

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