1.21 Gigawatts!

By Brent Pritchard

It was in an accounting class all about debits and credits that I figured out I wanted to study finance. Before I became a finance professional, I also had to take that economics class where it seemed like every day all they talked about was widgets. Since not everyone earns or spends in US dollars, it’s about time we had a name for an unnamed currency in finance that fits the bill. Enter the gigawatt.

I know, I know, a gigawatt is a unit of power. But I wouldn’t know that, and it might not ring a bell for you, had it not been for the Hollywood blockbuster Back to the Future. This movie was an instant classic.

In an introductory finance class, a classic first example that communicates the power of compound “interest” might be presented as follows (in the gigawatt currency):

• 1.00 gigawatt

• 10% interest rate (what I can’t help but specify is the true investment yield)

• 2-year investment period

This example assumes that there are no recurring payments (other deposits or withdrawals) over the investment period. (See why the word interest is so last year: there is a spectrum of investments, some that pay interest and some that don’t, which is why investment yield is a better way of thinking about return on investment.)

Copyright 2024 Brent Pritchard. All rights reserved.

What do you estimate for the future value of a 1.00 gigawatt investment after two years assuming a 10% true annual investment yield? 1.21 gigawatts!

---

Brent Pritchard is an author and college finance lecturer with over two decades of industry experience and cofounder of Boxholm Press, LLC, a family-owned-and-operated publishing company providing educational content, products, and services. He pioneers an innovative and approachable new way of learning and teaching the Time Value of Money as well as thought leadership in other business topics. His most recent book is Would Your Boomerang Return? You can contact him on his website here.

Time Is Ticking.

By Brent Pritchard

Do you value time over money or money over time? How might you be able to tell…?

Would you invest in a graduate program that in, say, two years’ time could potentially lead to a sizable bump in the amount of money you are able to take home every month or save?

Or, without a second thought, if given the opportunity would you trade all the money in the world to turn back the clock to spend just a little more time with a loved one who has passed, make things right with a child or parent…(fill in the blank with whatever currently haunts you)?

Lots of people pursue a path similar to the one described above. Some have the good fortune of a priceless (no money required) second chance.

What’s stopping you from doing either or both today (or one day before it’s too late)? (Today is a day we don’t get to live twice as the name somewhat suggests.)

---

Brent Pritchard is an author and college finance lecturer with over two decades of industry experience and cofounder of Boxholm Press, LLC, a family-owned-and-operated publishing company providing educational content, products, and services. He pioneers an innovative and approachable new way of learning and teaching the Time Value of Money as well as thought leadership in other business topics. His most recent book is Would Your Boomerang Return? You can contact him on his website here.

Is It the Money or the Math That Makes Your Head Spin?

By Brent Pritchard

This year, Thanksgiving break started out with a broken dryer. After turning every chair and table in our house into a makeshift drying rack, we were able to pack for Thanksgiving leaving only clean clothes back at home. Considering that it’s rare to see the floor in our laundry room on any given day, this was a huge victory. One thing remained and that was getting a service call in the calendar.

After punching numbers in the automated system, if my memory serves me correctly, I was talking to a real person from Mississippi. You know the drill, even if you haven’t had to call about a broken dryer: you give them your phone number, address, email, etc. Then I got transferred to another person in another state for who knows what reason, other than providing good fodder for this week’s blog post.

You can probably imagine what the next person did. That’s right! They asked for my phone number, address, email, etc. Are you kidding me?! This kind of stuff drives me crazy. While I have not been engaged by this dryer company whose name will remain nameless to consult on their business practices, I do believe that this can be explained by one of two things: an inadequate system or sheer laziness.

There are certain lines of work where you need to be good with numbers. Why do we have to keep repeating our membership number at the checkout? Is it because the cashier is distracted or just isn’t any good with numbers? We may never know the answer. And it doesn’t really matter. But that doesn’t stop me from seeing in my mind’s eye how this could have been a scene in a Seinfeld episode.

Why do people seek information if they’re not prepared to turnaround and use what information is provided?

This image was created with the assistance of DALL·E and prompts from Brent Pritchard.

Calling all aspiring finance professionals…here’s the punchline.

How prepared would you be to teach a one-day seminar on the topic of the Time Value of Money? (This isn’t out of the question if you’re about ready to be a finance professional, now is it?!)

---

Brent Pritchard is an author and college finance lecturer with over two decades of industry experience and cofounder of Boxholm Press, LLC, a family-owned-and-operated publishing company providing educational content, products, and services. He pioneers an innovative and approachable new way of learning and teaching the Time Value of Money as well as thought leadership in other business topics. His most recent book is Would Your Boomerang Return? You can contact him on his website here.