What is the Time Value of Money?

  For those of you who have never heard this term before, the "Time Value of Money" simply states that dollars have more value today than they do tomorrow.
  For a simple example of what I mean answer this question. Would you rather have $50 in your hand today or $100 five years from today? Sure it would be great to know that five years from today you will have $100, but you cannot do anything with now. Whereas having $50 in your hand today can benefit you immediately. You can pay bill, make an important purchase, or possibly invest that fifty dollars so you will have $500 five years from today.
  Another example of the "Time Value of Money" works like this.
Consider buying a sack of groceries or gasoline for your car. Put an imaginary twenty dollar bill in your hand and travel back 30 years to 1981. Think of how many loaves of bread or gallons of gas you could buy with that twenty dollar bill. If memory serves correctly a loaf of bread was about was about $0.59 and gas was about a $1.00 a gallon. This would equal 33 loaves bread or 20 gallons of gas. Wow, I could fill my gas tank, And buy about 5 loaves of bread on twenty dollars.
  Now travel back to today and go buy some bread or gasoline with this same twenty dollar bill. At approximately $1.59 for a loaf of bread and over $3.00 per gallon for gas your looking at 12 loaves of bread Or, about 6+ gallons of gas. Guess I'll only get 5 gallons of gas and 2 loaves of bread today.
  Lets take it one step further and travel just 20 years into the future. Now what can I get with my twenty dollar bill? Just enough gas to get to the store and back for a loaf of bread... I hope.

When you have a mortgage note and you are scheduled to collect monthly payments over long period of time you are subjecting your money to the effects of Time Value. What benefit does $100,000 over 30 years have over $50,000 today? I am not denying the fact that money spread out over time can be very beneficial to many. But keep in mind that when you collect that last "small monthly payment" your $100,000 will be gone, and what will you have to show for it?
  Consider the ways you can put $50,000 to work for you today and what it could look like in 30 years. A well invested $50,000 today could be a quarter million in 30 years, who knows. One thing is for sure, you can create whatever benefit you wish to, starting right now rather than many years from now. That is if you can manage to save those monthly payments until they amount to something you can use.
  One answer that always disturbs me a bit when I present these ideas to a note holder comes from the older folks. While it is a noble idea to hold onto a note so that when you pass your children can enjoy the benefits of an additional monthly income, I don't see the logic.
  This is your hard earned money and you should be able to enjoy it anyway you see fit. If that enjoyment comes from allowing your children to benefit from it, then why not do it now while your still alive so you can actually reap the enjoyment of seeing their lives enhanced. Besides that, think of how much greater benefit they can enjoy now opposed later when Time Value has diminished what your gift is worth.
  What if you took that $50,000 and paid off or paid down their mortgage. If they refinanced for a much smaller monthly payment or suddenly had no payment all can you imagine being around to watch their quality of life skyrocket.Who knows maybe they would even bring the grand kids to visit more often now that they wouldn't have to work so many hours to make ends meet. Now that is some quality enjoyment I would prefer to have as I get older.What fun do I have if they only benefit after I'm gone.
  Seller financing is a great way to sell property. Carrying the note is a great way to increase your profit through interest payments. Selling your note is a great way to improve quality of life today.
  Here at PSR Note-Ability we enjoy helping people to realize their dreams, improve their quality of life, and better their futures by creating win/win situations for all parties involved.
  We may even be able to help you out of a bad situation if you have a mortgage note that your buyer has stopped making payments on. Yes we do buy defaulted notes as well as quality performing notes.
  Visit www.psrnote-ability.com or call direct at 530-318-2662 for a no obligation quote on today's market value of your owner carry mortgage note.