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re: I wonder if Stingley is a little ticked right now...

Posted on 4/26/20 at 8:17 pm to
Posted by The Ostrich
Member since May 2009
2562 posts
Posted on 4/26/20 at 8:17 pm to
quote:

I'm sure the rookie scale will be higher so he will probably make more. But I learned in my Federal Income Tax class about something called the "Time Value of Money" and how acquiring revenue now is almost always preferable to deferring it to the future.

Thats not how time value of money works at all.
Posted by PhillyFan1994
Member since Sep 2012
2032 posts
Posted on 4/26/20 at 8:33 pm to
quote:

Thats not how time value of money works at all.


Well don't let me explain it then. Let the experts explain. LINK

quote:

The time value of money (TVM) is the concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that provided money can earn interest, any amount of money is worth more the sooner it is received. TVM is also sometimes referred to as present discounted value.


quote:

The time value of money draws from the idea that rational investors prefer to receive money today rather than the same amount of money in the future because of money's potential to grow in value over a given period of time. For example, money deposited into a savings account earns a certain interest rate and is therefore said to be compounding in value.


In other words the argument that Stingley shouldn't care about entering the draft now because he can still make money later is flawed because money he could be receiving right now could essentially be making him more money.

Also, we all know the real money any pro athlete gets from their team contract during their career comes from their 2nd and 3rd contract, not their rookie contract. The sooner a player enters the league the younger they are when they enter their second contract and the greater the likelihood is of them being able to negotiate a bigger deal.
This post was edited on 4/26/20 at 8:40 pm
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