By Brent Pritchard

I was planning on letting last week’s post season a bit before venturing back into part two of my thoughts on Beg. Mode. But it seemed fitting given that this is a time of transition for many. I’m referring of course to the graduation season. Congrats to the grads!

For those graduates going into a career in finance, can you name this calculator?

If not, and if your newest opportunity involves banking of any kind, that’s about to change. Notice the slight modification I made recently. Who knew about this alternative use for a paper clip?

Why would I want to do this (and deface my financial calculator by scraping away reference to Beg. Mode)? One word. Consistency. I like being able to tell you that for an annuity there’s a relationship between “N” and “PMT” as it relates to both inputs for the financial calculator and variables for the relevant building block Time Value of Money equation.

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):

The end of one period is the same as the beginning of the next period. Imagine you’re bringing in the New Year in New York City. For a split second, when the ball drops and it starts raining confetti, the end is the beginning. On the timeline, period marker 1 represents the end of the first period and the beginning of the second period, and so on and so forth.

We can expand this thought and say that the beginning of the timeline, which is represented by period marker 0, also represents the end of a prior period. Nobody ever taught me this in school, but you can add “real estate” to the leftmost side of the timeline. That’s right: period marker -1.

Why would you want to do this (and add a period marker -1 to a timeline)? Because when you ignore Beg. Mode like I do, and when you’re running the numbers to solve for the present value of an (even) annuity, your financial calculator will be providing you with a value as of one period before the first payment is to be made. If you need the value as of period marker 0 then you’ll be using the FV key to get you the answer that you could double-check using the Building Block Present Value of an Annuity Due equation. This is what I call a “two-step” operation.

When I typed “The End” in the manuscript that would later become the book Would Your Boomerang Return? I made sure to also type “: The Beginning” on that last line. Will I write another book? My answer might surprise anyone who hasn’t had the opportunity to experience a creative, all-consuming project. It was a gift. And gifts are received. So, we’ll see. I don’t know at this time. But what I do know is that never in my wildest dreams would I have ever imagined that I’d be an author, a college finance lecturer, a husband to a great mom, a dad…. I’d never finish this post if completion of such a list were a prerequisite.

What surprises would you welcome before “The End” of your life, and since you’ve given your dream a name what are you waiting for?

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.