Liquidation Value: All valuations consider present and future values. Value is generated over time. It begins in the present and extends into the future. This ongoing value is referred to as continuing value. Countries, corporations, households, and individuals set current values based on the belief that the present state will persist. What happens if it does not continue? It loses its future value. This state is known as the liquidation value. For example, this occurs if you quit your business. Almost all investments involve buying and selling assets based on their future worth. If you buy at a price lower than the liquidation value, you make a significant profit. If you buy at the liquidation value, you pay a fair price. If you pay more, you risk overpaying or buying a bubble. Value depends on time. Continuing a process is key to valuation. - Joseph’s “just my thoughts”
If only interest is applied to the principal, it is ‘ simple interest ,’ and if interest is applied to the principal including former interest, it is ‘ compound interest .’ There are people who make money through simple interest and through compound interest. The same goes for spending money. The difference between simple interest and compound interest can create an unimaginable impact over time. Time is treated fairly for everyone, but if compound interest intervenes in the uniform application of time, the results of compound interest will vary greatly, even after the same duration has passed. Being poor also has a cost, which is paid by compound interest. If you want to be wealthy, you must earn compound interest, not simple interest. The best way to achieve this continuously is to engage in small but regular actions every day, whether it’s investing in stocks or acquiring knowledge . - Joseph’s “just my thoughts”