The Time Value of Money
by Laura Maery Gold and Dan Post from Boot Your Broker!
Money lives in a funny place on the time-space continuum. It's a thing that looks quantifiable, but is, in reality, very amorphous. A hundred dollars kept under your mattress is, in a year, no longer the same hundred dollars. Given inflation, and lost opportunity costs, and the cost of the new door locks you buy to protect the money, it's probably only twenty dollars. (Or maybe the entire social-economic system collapses during the year, and your rare hundred dollar bill gets you 500 loaves of bread. But that's not very likely.)
As an investor, you must always be aware that any investment is a trade-off between what you're doing with the money, and what you could be doing with the money. Even if you do nothing, you're still doing something. Putting your money in a 2-percent passbook savings account is a conscious decision to forego other opportunities.
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