Present Value verses Future Value Dilemma

Present Value verses Future Value Dilemma

Present Value verses Future Value Dilemma

Present value versus future value is the dilemma.  PV=FV(1+r)-n

Every time people of a certain ethnic group obtain some money they look for something to spend it on. People talk about reparations but what would they do with it?  I believe that the only people who would benefit from reparations would be the caddy dealer and Nike.  It’s about holding back on what we want for what we really need.  For instance in 1986 I purchased a used Mercedes for 12 thousand dollars; because I wanted it even though I already had a car.  At the time the Mercedes was nice, I had no children and lived in an apartment; shouldn’t I have been thinking about the future…I needed a house.  It was because at the time I did not understand present value verses the future value of the money that I was blowing or that the stuff would quickly be worthless.  This flaw comes from not having somebody that we trust to explain the importance of present value verses future value; on our future.

Present Value

In 1986 the present value of that 12 thousand dollar Mercedes was a month of hustle…yes, the 80’s was all about the hustle…but what did I forego in the future value with that 12 thousand dollar purchase.  The hindsight that I FV being the amount you hope to have in -n (number of years) would have to grow at  r (percentage rate) per year which will explain what you need to do with PV (dollars) instead of spending it on Bullshit…  I know it sounds like a foreign concept so I have attached a video in hopes that it will help.

Save you money and stay paid my friend…

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