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Peak Performance Resources for Leaders by Leaders

glossary

Time

1. A period or interval; duration; continuance. 2. The period between two events, or during which something happened, exists or acts. 3. A precise instant, second, minute, hour, day, week, month, or year, determined by clock or calendar. 4. The point at which something has happened is happening or will happen.

Time Poverty

The state or condition of having limited actual or perceived discretionary time. This may include being money-rich, time-poor, or money-poor, time-poor. The time-is-money attitude values money over other less “productive” or aesthetic aspects of life. A society that values work, efficiency, business, money, and materialism can develop high levels of material wealth at the expense of happiness, creativity, philosophy, spirituality and relationships. Overscheduled and overworked is a classic symptom of low-quality time as well as a person’s inability to take vacations, enjoy leisure time, waste time, or relax. You could say they are wound up like a clock!

Time Value of Money

The value of money with a given amount of interest earned or inflation accrued over a specific amount of time. This is the central concept in finance theory, which suggests that a certain amount of money today, has a different value, or buying power than the same amount of money in the future. This principle is twofold; there is an opportunity to earn interest on the money and because inflation will cause prices to go up, thus changing the “value” of the money.

There are four primary reasons money has time value:

  1. Risk and Uncertainty: The future is always uncertain and therefore risky. Outflows of cash are in our control as payments have to be made by us. On the other hand, there is no certainty of future cash inflows, therefore the preference is for receiving cash now.
  2. Inflation: In inflationary economies, money that is received today has more purchasing power than money to be received at a future date. In other words, a dollar today represents a greater real purchasing power than a dollar a year’s time.
  3. Consumption: Most people prefer consumption today over future consumption.
  4. Investment Opportunity: An investor can profitably employ money received today in order to receive a higher value tomorrow.

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