Part I of the Next Book Is Almost Done …

There are some editing things that need to be done before I turn Part I over for layout but it's almost done. This is a huge milestone because it lays the foundation for the rest of the book and is the most mathematically intensive part of the manuscript.

Today, I should wrap up the quasi-final draft of Part I of the book, which covers somewhere between 110 and 130 pages and provides a list of virtually all of the time value of money equations that are important to new investors.  (I think the final book will end up being roughly 300 to 400 pages but I reserve the right to change that.)  It teaches:

• How to calculate your compound annual rate of return (e.g., “I had $10,000 five years ago and now the account is worth $31,500.  What rate of interest did I earn each year?  Is that good?”)
• How to estimate your future net worth based upon your current savings habits (e.g., “I put away $500 per month for 25 years and earn 11%.  How much will I have at the end when it is time to liquidate the account?”)
• How to discount cash flows (e.g., “I am going to buy a bakery that earns $31,500 per year.  I want to earn 17% on my investment.  How much should I pay?”)
• How to isolate mortgage interest and principal components (e.g., “I borrowed $300,000 at 9.25% for 15 years.  How much interest and principal will my 37th payment be?”)

And much, much more.  Basically, I walk new investors through what the formulas are, how they are calculated, and provide examples that could happen in real-life.  So formulas like this (see below) would make sense and you would see how to take out a calculator, complete them, and put them to work in your own life to help aid you in whatever it is you want … a new house, a more profitable business, or higher returns on your investments.

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