Time, Value & Money

• Access
  
  People need or want access to their cash. Sometimes they have a serious need to pay off credit cards, finance long-term medical care, or to settle a divorce. Other times, they simply have a desire to purchase a dream home, take a vacation, buy a new car or boat, finance a wedding, or start a business, for example. In some cases, people want access to their cash just for peace of mind. They no longer want to worry about liquidity issues, collection hassles, or the financial strength of the person who owes the debt.
  
  
• Interest or Yield
  
  People will sell their income streams - even for less than face value - because they know that with cash in hand today, they can start earning interest or yield. Interest or yield is what gives us the ability to invest money this year and turn it into an even larger amount of money next year.
  
  
• Inflation
  
  Inflation eats away at the future value or "buying power" of money. You can buy more with a dollar today than you will be able to five, ten, or twenty years from now. People sell their income streams because they realize that over time, the payments they receive will drop in real value.
  
  Small payments over a long period of time have less buying power. A Lump Sum of cash today can provide you with financial stability and flexibility. Purchasing Power!
  

Private Mortgage purchase - Time Value & Money

Time, Value & Money. It’s the fact that dollar$ today are worth more than dollar$ tomorrow! Grasping this important perspective goes a long way toward understanding the private paper marketplace. And it puts you in an excellent position to clarify certain financial decisions for your business.

To understand this concept, think of the flow of dollar$ in terms of the old bromide - "A bird in the hand, is worth two in the bush!" You know you won't go hungry. You also know that you won't have to spend any more time trying to catch your dinner!

What about those two birds in the bush? They present a whole series of decisions. For example, do you have to let go of the bird you have if you catch the two in the bush? Are there really two birds in the bush? Can you catch both? If you only catch one, will it be a better bird than the one you already have, and so on.

The point is simple: All investments involve a certain amount of risk. You are giving up money you already have, for an anticipated future that is greater. And, in deciding the worth of the expected additional benefit, you must evaluate risk of loss, depreciation, and opportunity cost.

Balancing these considerations is achieved through yield. The yield is your rate of return over a given period of time. Yield is used to judge use of a particular investment in itself, as well as in comparison to competing investment opportunities.

Intrinsic to yield calculations is time. Why is that? Well, lots of things can happen over time, and nobody knows with absolute certainty what it will bring. The longer you have to wait for your money, the greater the risk that you may not receive it or, at least, not all of it. Likewise, don't be deprived of the use of your money for the investment period and the collateral risk of lost opportunity with respect to alternatives.


Discounting

Knowledge is power! You can use your understanding of the Time Value & Money to give added value to grow your business. Invest in other real estate opportunities !!!

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