One way to see time value of money(TVM)

An interesting perspective to TVM

I am happy to be back after a long break. Though unannounced, the break gave me a fresh perspective on several things. One of such is the absolute needless pain we bear trying to please people. It took several incidents for me to learn my lesson. Now, I am getting better at decision-making. I know what I want, and how I want it. If there is one thing adulthood has taught me, it is the fact that I must make decisions every day and every single decision sums up to becoming who I become. It is humbling and unsettling sometimes.

One of the key lessons I have learned as regards decision-making when it comes to my finances is time. In 2019, I invested in some technology-enabled agricultural companies at a certain ROI but the returns did not come through as planned. The company has clear-cut operations, and everything was smooth until the company’s debtors were not paying as quickly as they should have. So, Company A does business with a governmental agency and there is a valid agreement. This government agency received the agreed raw materials but failed to make payment as of when due. After several persuasions, the business decided to sue the agency and the matter is still in court to date. This is one of the several debtors that have failed to honor their side of the agreement.

Company A is unable to pay investors who have participated in the investment rounds because they are cash trapped. Investors are unable to recover their principal and interest and therefore, they cannot meet certain financial obligations. In all these backs and forth, inflation had moved from north of 15% to 19%. The same inflation I was trying to beat by investing has beaten me hands down. I have no idea when I will receive my funds. I have recognized it as irrecoverable debt.

By now, you can see how decision-making has affected different sets of people and the effect on the purchasing power of such entities. The key takeaway is to always consider the consequences of your actions. A prudent investor always considers the “what if” of every investment. This is to give him/her a better view of risks and returns.

As your progress with your day, never lose guard of your everyday decisions. Be intentional about your decisions and take note of the effects.

Cheers to a profitable lifestyle,

Tosin Lawuyi (TL).