By Brent Pritchard

One day on my run-commute home I noticed something interesting. This wasn’t meant to be an exploratory run. Although those are fun, this was just another run down a street I’d covered many times before. For any other passerby, what I had stumbled across might be thought of as just another hole in the ground. As for me, I couldn’t have asked for a better teardown since it was this imagery, complete with steps leading to nowhere, that I have used to describe the bigger problem with respect to the Time Value of Money. So, I took a breather and snapped a picture.

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):

With gatekeeper publishing houses having developed the blueprint, the content relating to the Time Value of Money in most publications is cookie-cutter. It was in industry literature—papers not books—where I found PhDs or PhD candidates attempting to “enter through the back door.” This is where I found attempts to develop systems to provide aspiring and current finance professionals with a method for applying the Mathematics of Finance.

Since my area of expertise is in real estate, that’s how I tend to see the world. Traditional textbook publishers had attempted to lay the footings as it relates to the Time Value of Money, but it was as if they had put the house together before the foundation was ready and with missing parts.

Those in academia who had identified part of what I call the “big problem” deserve a pat on the back. It was their work that helped me further see the need for this book. But their attempts at developing a go-to systematic approach left much to be desired. It was as if they were laying the steps by a big hole in the dirt where the foundation should be—instead of building from the ground up. The gaping hole I found in these attempts was that each one lacked definitive steps. Much of what I found consisted of flowcharts with questions that instead of leading to an answer seemed to raise more questions, which is a problem!

What started as a search for a better resource to help my students master the concept of the Time Value of Money ended with my typing “The End” and this book being published for a bigger audience.

Between these two points in time, I embarked on what people in the real estate industry like to refer to as a “tear down and rebuild” project. People buy houses that are complete and structurally sound. Custom homes are built from the ground up. The main components of a house that I want to zero in on for this illustration are the footings, foundation, frame, walls, roof, picture windows, and steps.

Now let’s put this in terms of the Time Value of Money. The footings represent the original TVM Rules based on the mnemonic indifferent. The foundation represents the improved building block Time Value of Money equations. Some people reading this will know that foundation walls were once predominately built with cinder blocks, hence the placement of the building block Time Value of Money equations in this illustration. The frame represents the “Need to Knows.” The walls represent the “Good to Knows.” The roof represents having all the important or essential information on this all-important topic in one place. The picture windows represent the visual aid that is the TVM Wallet. And last but not least, the steps represent the simple and definitive 3-Step Systematic Approach.

Simply put, I put myself in the shoes of someone who had never before been introduced to the Time Value of Money and asked myself the question, “How would I like to have learned about the Mathematics of Finance?” This question served as the North Star for this project that had me wearing a student’s shoes and an architect’s hat.

The age-old fundamentals remain; however, the holistic perspective and 3-Step Systematic Approach will help aspiring and current finance professionals apply the Mathematics of Finance with confidence to analyze and evaluate real-world Time Value of Money situations—in the classroom, in practice, or while sitting for an industry designation examination. This how-to manual for the Time Value of Money will position you such that you can double-check your work using little more than a pen or pencil, paper, and basic calculator functions.

How many traditional textbooks do you think it would take to backfill such a hole in the ground? (Don't assume that such a parcel was left on the parcel, but I’m just saying.)

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.