Financial Planner and Time Value of Money
Financial planners always stressed that the time value of money or the Time Value of Money is very important in family financial planning and also influence the success of family life achievement.
Then what exactly the time value of money? This illustration is the reply we have the money now is Rp. 100 million, so if we put this money into investments that provide returns for the assumption of 12% per year (assuming nett) then within 1 year the amount of money we will be Rp.112 million, so within 2 years would be USD 125 , 44 million, within 3 years to Rp. 140.49 million and so on until his reply to Rp 20 years. 964.63 million and so on so forth. So the sooner we invest, the more money we will collect in the future. Well that’s just assumption reply USD lumpsum money. 100 million had been, how we reply also continue to invest every month Rp. 3 million in addition to money Rp. 100 million had we invest for 20 years how much money or the value of our investment until the end of the year to $ 20. 3932.40 million. Wow …. Big, too well … .. big or small is relative, but showing the money … that’s breed effect caused by the time value of money.
Then what purpose dong for family financial planning, its use is to facilitate financial planning itself so that financial planning can be done. Without the assumption of return or the opportunity cost calculation technique of the time value of money used in financial planning can not be done. Now we return to the example above where the last example of money or value of investment to Rp. 3932.40 million in 20 years time assuming 12% return each year. Well now live behind aja kalo you want the value of your investment to Rp. 6 billion in 20 years, how much additional investment should be done every month with the same return assumptions? Not easy, just stay behind it …? but wait … it all possible … in fact the assumption of financial planning is more complex than that because there are other things that must be considered as a lower level of inflation the purchasing power of money and other things that come back are also associated with family life goals. When combined with other assumptions asumsil the Time Value of Money is going to work more effectively in helping your financial planning. What is your plan? Time Value of Money will make your plan possible.
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