Question

What did Richard Thaler have to say about the time value of money?

What did Richard Thaler have to say about the time value of money?

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Answer #1

Robert Thaler has to say about time value of money that investors should treat money as perfectly fungible when they locate among different account so that does not lead to make irrational investment decisions and behave in financially counterproductive or detrimental ways.

He advocated for a theory called mental accounting which refers to different values people place on money which is basically related to the field of behavioural economics and it contains that individual classified funds differently and therefore led to irrational decision making in their spending and investment behaviour so it is not necessarily true that that time value of money with grow with time a discount with time so it's all about investment decision that's being placed on the money that makes the the money earn multiplier return.

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