What Do You Fear More: Flying or Flying Blind With Money?
First-time visitors who have stumbled across this blog are in for a treat. This is the corner of the internet where Time Value of Money lessons are communicated with stories that relate to real-world situations.
Take today for example. “It’s not every day that one flies to London” was the sentence that I had planned to write before a delay left me typing this post at O’Hare at 12:58 AM. (What follows is what I had planned to share from my outpost, but it still works. And that’s good, because I’m tired. No coffee in sight!) Yesterday, when we were driving to the airport and in between thoughts of how much I’d miss my family and dogs, it occurred to me that the topic of the next blog post was a no-brainer. Such a trip deserves a storyline about flight.
Photo by Brent Pritchard.
Here’s an excerpt from my book Would Your Boomerang Return? What Birds, Hurdlers, and Boomerangs Can Teach Us About the Time Value of Money (2023):
Actually, the four forces of flight relate to the topic of the Time Value of Money. “Does it fly?” in the context of flight comes down to drag, thrust, weight, and lift. Drag refers to the force that pulls things backward. Thrust refers to the force that pushes things forward. Weight refers to the force that pulls things down. Lift refers to the force that pushes things up. In the context of the Time Value of Money, we can think about discounting as drag, compounding as thrust, the hurdle rate as weight, and NPV as lift. While there are four forces of flight, lift is the outward sign of flight. In the context of the Time Value of Money, a positive NPV is the signal that an investment opportunity will “fly.” A pilot’s preflight check can be likened to a finance professional needing to double-check his or her math.
What would it take to find insights and new in the “old,” and where might that train of thought take you?
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.