Editor’s Note: This article is for informational purposes only and does not constitute investment advice. This article should not be considered a solicitation, offer or recommendation of financial products and services discussed.

The time value of money is a simple concept that is easily understood, yet not enough farriers think about and apply it to their practices. The financial website Investopedia states that the time value of money is the theory that money available today is worth more in the future than that same amount you have in your pocket at this moment.

The reason money is worth more in the future is because of the ability to make compound interest on your investment. Compound interest is earned on the principal investment, as well as the accumulated interest earned. This is a powerful tool and should be used to your advantage throughout your career. Whether you use a certificate of deposit (CD), a savings account or a mutual fund, these financial instruments allow your money to make you more money. We’ll discuss a few instruments and the reasons why you should utilize them in your business in order to put your money to work for you rather than you simply working for your money.