Finance Professionals’ Pride and Joy is TVM.
I hope I’m not giving too much away, but in my classroom, I follow a simple model: it’s impossible for people to laugh without smiling, and when people are smiling, they’re happy. One of the things I do to get people energized (and later engaged) is playing that old time rock and roll. One of my favorites. The late, great Stevie Ray Vaughan (SRV).
(In real life, we have Marty McFly to thank for inspiring John Mayer—my second favorite guitarist behind SRV—to pick up the guitar. Well done, McFly!)
This image was created with the assistance of DALL·E and prompts from Brent Pritchard.
Supposedly, the great Texan and guitarslinger had a limited knowledge of musical theory, couldn’t read music, and never played a song the same way twice. While that’s an incredible gift if you’re a musician and virtuoso, aspiring and current finance professionals need to have a sound grasp of the concept of the Time Value of Money, should be able to read the numbers, and ultimately find confidence through repetition.
The hallmark of the TVM Formula, which is described in Would Your Boomerang Return? and that is the 3-Step Systematic Approach, provides just that, so you can get about sharing your unique skills and experiences with the world in your current or future capacity as a finance professional.
Here's a question from the “Pop (Open the Back Cover) Quiz” in Would Your Boomerang Return? What Birds, Hurdlers, and Boomerangs Can Teach Us About the Time Value of Money (2023):
You plan to deposit $2,000 today and at the end of each of the next five years into an investment account that is expected to earn a simple annual investment yield of 7% with quarterly compounding. At the end of the sixth year, you would like to take the first of seven consecutive annual withdrawals of $1,750. What do you expect for a remaining balance after the last withdrawal? (Answer: $8,132.49)
How do you feel about answering this TVM question (the same way twice)?
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.