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Showing posts from July, 2006

Understand the time value of money

By James Abola Most cartoons are supposed to be interesting but I recently saw a really interesting one in a local newspaper. In the cartoon a sweating man was facing two other men who were smiling in a sly way from across the table. One of the smiling guys told the sweating fellow: “We know what you ate from various places. Remember we do not take bribes but you can join our party.” The lesson from the cartoon is that knowledge is power. The one who knows has control and the one who lacks knowledge also lacks control. Those who have ever ridden a bicycle will appreciate the importance of control. Riding a bicycle that is going down a steep slope without the means and ability to control it can be very unsettling, to say the least. One of the things to know about money is what is called the time value of money . Academics claim that the time value of money is the foundation for the subject of finance. The good news is that it is not just academic but there are many ways in which the tim