That is one of the basic principals, a dollar today is worth more than a dollar in the future. This is really b/c of inflation.

Tishbel wrote: It doesn't seem as complicated as I thought it was. Basically money loses value over time.....

Especially if it is printed out of thin air. It eventually reverts back to a zero worth. Currency backed by precious metals though, like gold, only lose value if the gold that backs it loses value.

It doesn't seem as complicated as I thought it was. Basically money loses value over time, so money in the future is worth less than the same value cash in hand now. I guess it affects savings and personal finance as well, e.g. if money is going to halve in value every ten years, an investment running for ten years had better pay out more than twice its value to be worth it.

This was a really interesting read about something I didn't know anything about, but I think I'm going to have to read it several times before it really sinks in. I struggle with math and even when it's put into explanatory terms, I have trouble wrapping my head around it.

That's a great article for anyone who is starting their own business or helping someone who is. Do you think that learning the DCF would be useful to your own personal finances? I've read that some people use it for stocks.

I agree and good overview. DCFs are very useful and I would absolutely recommend people to learn the dynamics of DCFs

Here is a very good article that explains it detail: https://www.thestreet.com/story/10385275/1/getting-started-with-discounted-cash-flows.html

It sounds complicated, but this is something that my gut is telling is worth learning.

Thanks for the tip..........be it 5 1/2 years old, it's still relevant.

A Discounted Cash Flow or DCF model is used for the calculation of linking streams of future money
which flows to lump sum amounts. DCF models have a wide range of business-related applications,
and used extensively by economists, accountants, finance professionals, and others.