Whats so Funny About the Time Value of Money

By: IC

As it has been discussed many times over, money, especially in US currency (the US dollar) tends to rapidly depreciate according to the financial movements we are living. The US dollar is the main currency which is used to give equities and commodities their value, with the backing value of gold behind this currency the worth of every dollar remained strong, however due to inflation and a declining economy which many consider may fall into recession nothing is sure as far as the future value of money.

At the moment the only investment worth holding on to is gold, which has kept its value fairly strong regardless of the financial difficulties not only the US is going through but several other currencies as well. Some people may find this result logical, after all the US dollar is one of the currencies used to give gold it's worth, if the value of the USD falls then the value of gold rises, at least those who trade currencies have certainly seen it this way.

It is funny how money can fluctuate, appear strong during some years and dramatically loose its value in a few months, smart investors know that we live in times when the value of not only the USD but many currencies are loosing their worth, so the most important thing to do is to think in terms of yield and alternative investments. It is most certain that having future payments or instruments which deliver their full potential many years from now are loosing their worth dramatically so why hold on to them? the smartest move would be to cash that future note and reinvest it in areas which are much more stable, this would leave out the declining housing market in the US of course.

As presidential elections get closer we hear candidates say how they will change this and that in order to alleviate the financial stress and deficit the country is going through, however those who decide how money will be spent and invested are each and every one of us, no candidate can tell you how to effectively invest your annuities and structured settlements, it is up to you to know the current value of your investments and make an intelligent and educated decision about them.

There used to be a time when the Fed didn't print out much money in order to keep the economy a float and it was said that the makers of the game "monopoly" printed more money than the US treasury, sadly enough the game has changed and things are now the other way around.

Opposed to what many people may think, their structured settlements, annuities and similar investments are not gaining any value or interest and as time goes by the risks which recession can bring about could greatly diminish what little we have today.

Money Management
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