If I am to earn $1000 in a week while he takes 13 weeks for the same absolute amount, we both earn same $1000 in the world of Classical Relativity. In Special Relativity, he has aged 13 time faster than me. I am 13 times more efficient ! And Time is the Cost of Money.
In absolute amount, the cost is 47% of the $1000 for 13 years. Don't be blinded to holding cost. Is a huge one.
Let's do an example from another perspective where I borrow $1000 instead. What's the holding cost between 1 year and 13 years ? See table below using compounding logics.
| Years | Borrow | Interests | Cost of Money |
| 1 | $1,000 | 3% | $30.00 |
| 13 | $1,000 | 3% | $468.53 |
In absolute amount, the cost is 47% of the $1000 for 13 years. Don't be blinded to holding cost. Is a huge one.
Cory
20160406
yes. but holding cash doesn't necessarily incur costs only and sometimes it will rise in "singapore spending" value. if you are curious, I will say one word: currency.
ReplyDeleteHope i got it right. Holding cost is there regardless since you can invest in S$ denominated or leave in S$ cash. And if we attempt to cash out to another currency, that's kind of forex trading.
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