forest
economy
forest
finance
forest
taxation
timber
taxes
forest
accounting
my-forest
discount
rate
real
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seminars
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landowner
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owner
links
in forestry
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forest economics
My-forest
consumer price index
producer price index
log markets
forest landowner
forestland owner
Interest is a concept absolutely critical to our understanding of forestry finance. Conceptually, interest is a measure of the time value of money. "What are you willing to give up now in favor of money in the future?" determines your preference to invest money now. If the bank pays you 3% interest on a savings account and you invest money in that account then you have a very low time preference for money now versus later. Conversely, if you borrow money from the bank at 12% interest, then that defines that you have a preference for current consumption over future consumption at a rate of 12%.
How then do we explain a person who invests money at 5% in the bank while borrowing money from their credit cards at 18%? What other factors influence this decision? Where do you define your limits of being an investor versus a borrower? How does a company determine this issue? Why would Potlatch Corp. have a different interest rate preference than Georgia Pacific?
forest
economy
forest
finance
forest
taxation
timber
taxes
forest
accounting
my-forest
discount
rate
real
price appreciation
seminars
forest
landowner
forestland
owner
links
in forestry