When given the choice of whether they would rather have a lot of money right now or a little less money in a years time, most people will tell you that they will take their money right now, thank you very much. The value of a dollar in your hand is greater to most people than the value of a potential dollar later, and that makes a dollar in the present worth more than a future dollar, which is the principle behind the discounting of real estate notes for sale.
The professional real estate note investors use a special formula to determine how much money a note is worth to them based on the time value of money and on the future value of the money involved. As we just learned, money today is of more value to us than the potential for money in the future, so r View the rest of this article
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