TVM stands for time value of money. It is a basic finance principle stating that a present amount of money is worth more now than it will be in the future. My economics professor often used the following expression: "One dollar today is worth more than one dollar tomorrow."The reason for the TVM is because the money you hold today has the ability to earn interest. You'd rather receive that dollar today so that you could put it in an interest bearing account and let it grow. For example, I receive $100 dollars and deposit it into a savings account earning four percent interest. A year from now, I'll have $104. So given the choice between receiving $100 today or a year from now, I definitely want it today!
Extra credit: TVM explanations like the one above are often simplified and do not take into account inflation or deflation. If, in the above example, inflation were also four percent, it would intensify the TVM concept because the $100 received in the future would actually only be worth $96.
Wine pairing: TVM can be a funky concept, so try something really different, like a Pinotage from South Africa. Pinotage is a cross between the grapes Cinsault and Pinot Noir, and often has gamey and earthy aromas and flavors mixed with bright cherry fruit. Some more available brands are Fleur du Cap, Fairview and Ken Forrester.
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