We weigh every significant decision based on how it will affect our future. But when it comes to figuring that out, we mostly make the process up as we go along. While I can’t help you actually predict the future, I can offer a simple, systematic way to make much better guesses about it—and so make better decisions.
In this book, I have tried to provide an accessible, step-by-step guide to using the powerful concept of Present Value—which allows you to determine the value today of something that might happen in the future—to evaluate all of the outcomes that might arise from choosing one path as opposed to another. In it are examples that anyone can relate to, and I walk you through the process of making those choices. Your old refrigerator doesn’t work as well as it used to—should you buy a new one right away or muddle through for a while? You’re offered a great discount on a service you don’t need at the moment but eventually will—buy the service now or wait?
With just a little math and some common sense, you can compare future costs and benefits with present costs and benefits and make “apples to apples” comparisons. I believe that this book will be indispensable for anyone who has ever had to figure out whether to stick with an awful job or follow his or her bliss, fix that old car or buy a new one, increase 401(k) contributions or keep the same take-home pay, and a thousand other decisions.