Why isn’t the time value of money applied to currency in terms of purchasing power? Let’s say I have a dollar from 1930. I should be able to exchange that dollar today anywhere based on its present value, right? Doesn’t make any sense to me but I’m slow
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“Time value” of money referrs to how much money your time is worth, not how much time has passed since your coins were minted.
For example, some people say it’s better to change the oil on your car yourself because it costs less money. It’s true that it costs less money to change your own oil, but that’s where the “time value of money” comes to play. With the time I would have spent trying to save maybe $40, I could have instead used the time to make $400 doing something else. That’s why saving money in this situation is not worth it, because it costs time, which in turn has an opportunity cost which was worth 10x money than I saved.
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