# Time Value of Money Primer

Time value of money (TVM) is represented by the difference in value of some dollar amount of money or cash flow(s) over a period of time, assuming one can earn some sort of return on the money available.

Simple interest is calculated on the principal only while compound interest is when one also earns “interest on interest.” Compounding may be used to describe moving a value or cash flow forward in time:

Future Value=FV

Present Value=PV

# of years=n

Cash Flow/Payment=PMT

nominal rate of interest=i

FV = PMT(1+i)^n

You have \$50,000 to invest. If you think you can earn 7.5% annually, how much might you accumulate in 30 years?

Discounting is known as the process of moving a value or cash flow backward in time:

PV = PMT/(1+i)^n

If you’d like to have \$50,000 in 5 years, how much might you have to invest today assuming a 5% rate of return?

Real returns are sometimes described as the rate of return one receives net of inflation but may be more accurately calculated:

Real rate of return=r

r=[(1+i)/(1+IP)]-1

One should consider the effect of taxes on earnings as well.

# Do you need a will?

An estate is all the rights, titles, or interests that a person (living or deceased) has in any property.

Estate transfer is the act of conveying title to property interests from one person to another. Selecting proper estate transfer alternatives is the key to efficient and effective estate planning.

At death, transfers occur either through probate—i.e., by will provision or according to state law—or outside probate through “will substitutes,” such as trusts, contracts, or the way title is held.

-College for Financial Planning

Estate planning should decrease the amount of property transferred by will upon death. The service of a trust and estate attorney may be necessary.

On May 3, 2013 I was fired from my previous position. When I got dressed that morning I chose my best suit, tie and pocket square, and made sure they coordinated perfectly. It was Friday and I knew my life was going to be different from that day on.

After being escorted out of the office, I walked to the local car dealership and bought a used Honda Civic, which I named Ralph. If I was going to start a business I knew I would need a vehicle. While I waited for the dealer to prepare the paperwork I got on my laptop and booked a flight to L.A., departing the next day.

That evening my long time girlfriend informed me she no longer wanted to be in a relationship, with me… By the time I landed in Los Angeles I had completed 9 pages of my business plan.

If we consider a business plan a living document, it is never truly complete. As the environment changes and we receive new information the strategy and tactics should be adjusted accordingly. Though writing a business plan may seem like a daunting task, it is necessary for business success.

June 3, 2013 I established Coroebus Wealth Management, LLC. July 23, 2013 I held our Grand Opening celebration at the N.J. Historical Society. August 29, 2013 CWM was approved by the state of NJ as a registered investment advisory firm.

February 26, 2016 the U.S. Small Business Administration certified CWM as a participant in the 8(a) Business Development Program. I have begun working on an automated investment management application, or robo-advisor, called Pythia℠  scheduled for pre-release July 23, 2016.

My passion was born of necessity. Where will you find yours?