The Time Value of Money (TVM) is a core financial principle stating that money available today is worth more than the same amount in the future. This is because money invested today can potentially earn returns through compounding, while inflation and opportunity cost reduce the future purchasing power of money. TVM forms the basis for investment valuation, retirement planning, and long-term wealth creation. It also highlights the benefits of investing early by showing how returns can compound over time. You can apply this principle and estimate the potential value of your investments using an SIP Calculator.
