• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
NoteInvestor.com Logo with House next to words

Note Investor

How to buy, sell, broker or invest in private mortgage notes for cash flow!

Your Trusted Source For
Note Investing Information!

  • Home
  • About
  • Articles
    • Notes 101
    • Note Brokers
    • Note Buyers
    • Real Deals
    • Seller’s Corner
    • Cash Flow Business
  • Learn
    • Sell Your Mortgage Note
    • Note Broker Training
    • How To Buy Notes
    • Note Buyers Directory
    • Creating Notes With Seller Financing
    • Note Investing 101 Series Videos
    • Note Industry Conventions
  • Bookstore
  • Contact
  • Sell Your Note

What is Time Value of Money?

January 28, 2009 by Tracy Z Leave a Comment

 

We’ve all heard the phrase “Time is Money”. But what does it really mean and why does it matter in the discounted note business?  Here’s the short and simple answer!

Money today is worth more than money tomorrow due to its ability to earn interest.  The Time Value of Money concept puts a price on the amount of time an investor has to wait for an investment to mature.

To illustrate, if someone offered you $50 cash today or $100 cash in 30 years, what would you choose?  Most of us would instinctively take the $50 today because we know that the buying power of $50 today is going to be greater than the $100 way out in the future.

But what if someone offered $50 cash today or $100 cash TOMORROW? We might now be willing to wait a day (assuming we knew we’d get paid).  What changed?  The amount of time that had to pass!

Of course this is a simplified example and it takes a mathematical formula and the help of a financial calculator to make exact calculations. Just know the way time affects the value of money in combination with the note interest rate and the investor’s desired return will play an important role in how much that investor will discount the price of a note.

It just doesn’t seem fair to leave all the secrets to making money in the hands of the big time investors. So, be sure to visit https://noteinvestor.com/category/notes-101/ for more examples and ways to calculate the present and future value of money to your benefit!

 

Filed Under: Notes 101 Tagged With: discounted notes, Note Discount, sell mortgage note, seller financed note, time value of money

About Tracy Z

Tracy combines her knowledge of real estate notes with the power of marketing online to help grow your business! She can be reached at Tracy@NoteInvestor.com or by calling 1-888-999-7905.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Learn Real Estate Notes

Click the reports below to download your FREE copy of 5 Ways to Cash in on Notes AND a BONUS!
Diversified Investment Services Inc BBB Business Review

Search This Site

More to See

Investing Notes Risk

21 Tips To Read Before You Get Started Investing in Notes

Selling Mortgage Notes? Find the Right Note Buyer!

Learn Note Business

Learn the Note Business in 60 Seconds?

Cash Flow Notes Business Truth

5 Myths About the Cash Flow Notes Business

Most Read Note Buying Info

How To Buy Mortgage Notes
Creating Notes With Seller Financing
Note Broker Training
Get Direct With Note Buyers Directory
How Can I Find Cash Flow Notes?
Buying and Selling Notes For Residual Income
How Dodd Frank Mortgage Laws Apply to Seller Financing
How To Calculate Cash Flow Notes
Note Investing 101 Series Videos
Best of Notes 2024

Connect With Us

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

Footer

Places to Visit

  • Creating Notes
  • How To Buy Notes
  • Note Broker Training
  • Note Buyers Directory
  • Sell Your Note
  • Bookstore

We Are Here to Help

Photo of Fred Rewey and Tracy Z of NoteInvestor.com
Fred Rewey & Tracy Z NoteInvestor.com

Receive the Note Investor Newsletter

COPYRIGHT © 2008-2025 NOTE INVESTOR | PRIVACY POLICY | CONTACT US
This website is for informational purposes. This is not an offer to sell or purchase any security. Nothing is intended as legal, financial or investment advice. Any historical data represents past performance and does not guarantee future results. NoteInvestor.com is owned by Diversified Investment Services, Inc.