Nordicsupreme
New member
- Joined
- Mar 12, 2025
- Messages
- 42
Personal Finance Decisions/Project Finance Decisions
On Financial Decision-Making and Resource Allocation
In both corporate finance and personal life, sound decision-making around resource allocation—particularly money and time is important. Just as companies use capital budgeting techniques to evaluate the feasibility of long-term investments, I apply similar frameworks when making personal financial decisions. This approach has been instrumental in helping me manage current expenses while also preparing for the future in a sustainable and structured way.
One of the most important shifts we can make is to begin viewing both money and time as finite, strategic resources. They are tools meant to support our broader goals like achieving financial security and ideally creating the conditions for early retirement. Freeing up these resources can allow for deeper focus on personal aspirations, growth, and higher purposes.
While money is often viewed as a measure of value or even self-worth in many parts of the world, as Zevists, we recognize that money is not an end in itself. Instead, we understand it as a means : a resource that supports independent decision-making and gives us the freedom to align our actions with our deeper values and goals.
Of course, the ToZ teachings offer a higher level of reflection and should remain our primary source of knowledge and guidance. My intent here is simply to share what I have learned so far in hopes that it may benefit others in the community.
For those interested in diving deeper, there is a wealth of excellent financial knowledge available through books, courses, and online tutorials. I encourage everyone to explore these resources to complement their understanding.
Goal : Is to make money decisions and run your money affairs as businesses do
The ultimate goal of financial growth, in my view, is not luxury for its own sake, but freedom to live life on your own terms, to raise a family with care and presence, to deepen your spiritual practice, and to become a more complete, well-rounded human being.
Money is a tool, not an end in itself. Used wisely, it can empower us to escape survival-based living and invest in the things that truly matter: health, relationships, purpose, and self-actualization.
Unfortunately, the current system is structured in a way that keeps many people financially trapped. From misleading financial advice to consumer-driven distractions, the average person becomes a servant to money rather than its master. This is not only limiting but it is deeply harmful to individual and collective potential.
While I don’t claim to speak from a place of spiritual authority, I do recognize the value of aligning our material life with higher purpose. In that spirit, I defer to the experts and teachings that guide us spiritually. What I can speak to is the importance of economic independence not just for ourselves as individuals, but for our families, communities, and the legacy we hope to revive.
Let us not forget our ancestors were kings, generals, warriors, scientists, philosophers. It is not just our right, but our responsibility to rebuild that legacy in today’s world. Wealth, when directed with wisdom and integrity, can serve as a powerful force for personal sovereignty and cultural restoration.
Capital Budgeting: Have you ever wondered how multinational corporations generating billions in revenue manage their operations? What strategic decisions do they make when they have abundant capital, or conversely, when they face financial constraints?
In this discussion, we will explore these questions through a practical example, followed by formal definitions sourced from authoritative references such as ChatGPT and Google.
Definition: Capital budgeting is the process that businesses use to evaluate and decide whether long-term investments or projects are worth pursuing. These investments typically involve large amounts of money and are expected to generate benefits over several years. (Taken from Online Sources)
Recognize that you, like money, are a finite resource with limited time and opportunities available to you. It is essential to invest your financial resources wisely, understanding that returns often require time to materialize. As such, patience is a critical virtue in the journey toward financial growth.
Remember, life is not lived in days, weeks, or even years alone it is a long-term endeavor. Embrace this perspective, remain steadfast, and take proactive, informed actions to steadily build and preserve your wealth over time.
Examples of Capital budgeting decisions can include:
1) Setting up a new factory
2) Buying new machinery for your business
In terms of Personal Capital budgeting Decisions:
Capital Budgeting Decisions are decisions that have a life cycle of more than 1 year as has been discussed before.
AA) You buy a home with the intention of either living in it or benefiting from its appreciation in value over time.
B) You invest money in education with the expectation that your return on investment will justify the expense. For example, not spending $60,000 now on education may limit your ability to earn $120,000 or more in the future. (Remember, you don’t live for just a day : you are here for the long term.)
C) You buy a washing machine for $2,000 with the intention that it will save you time and energy, which can then be used for other purposes. There can be an emotional component to this decision, but another way to evaluate it is by comparing it to how much you currently spend on laundry and dry cleaning. For instance, if you pay $5 for a shirt and $6 for a pair of pants, and you have 3 shirts and 7 pants, assuming you get your clothes cleaned and ironed once every two weeks, your total weekly cost would be approximately $43.50. Over a year, this amounts to about $2,262. While these are just examples, they illustrate the math behind such decisions.
Formulas/Tools used to do this analysis:
Finally, it is important to remember that nobody can guarantee what the future holds. How things unfold depends on many factors. Therefore, we use projections for our analysis. But what exactly are these projections?
Referring to our previous example, we “projected” the costs of laundry for the coming year. Any projection is based on certain assumptions. Our assumptions, for example, were:
1) One key assumption is that you will remain alive throughout the entire financial year. While this may be said lightly, it is also a serious consideration encouraging you not to live solely for the moment.
In accounting, companies operate under the “Going Concern” concept, which assumes that the business will continue to operate indefinitely without any predetermined expiration date for winding down or liquidating its assets. This principle underpins long-term financial planning and projections.
2) That you will ensure to maintain hygiene and keep yourself and clothes clean and presentable ( For example, ToZ Industries manufactures talismans and clothing accessories that consistently meet high-quality standards and do not use inferior raw materials.)
3) That you always use the same dry cleaner (For companies, this can mean using a consistent source of financing that charges a fixed interest rate. For example, ToZ Industries, which manufactures talismans and other clothing accessories, works with a financier who charges 5% per annum interest on the loaned amount, compounded annually) or dry cleaners that charge the same amount for the services
Formula/Tool 1: Net Present Value
It is well understood that money tends to lose value over time due to inflation. When projecting future cash flows and discounting them to their present value, it is important to determine what the equivalent value of, for example, $20 received tomorrow would be in today’s terms.
Example: We spend $1500to set up ToZ Industries today.
So our present money (Year 0) = -$1500( Since this an outflow of money from our accounts)
From this aim to generate $40 monthly revenue projected straight for 5 years timeline.
This makes our yearly income come to: $480
This would make revenue for years 1,2,3,4,5 = $480,$480,$480,$480,$480
As of August 26, 2025, the yield on the United States 30-Year Treasury Bond is 4.90% For our calculations, we use the 30-year US Treasury bond interest rate as the discount factor. Essentially, this rate represents the opportunity cost of holding money idle each year instead of investing it in a Treasury bond.
The present value of these future revenues brought to Year 0 then becomes (This is known as Discounting Future Cash Flows)
Year 1 : 480/(1+0.0490)^1 = $457
Year 2 : 480/(1+0.0490)^2 = $436
Year 3: 480/(1+0.0490)^3 = $415
Year 4 : 480/(1+0.0490)^4 = $396
Year 5: 480/(1+0.0490)^5 = 377
This brings our total Revenue: $2081
Comparison of future Cash Flows in Present (Year 0) Values with the Present Outflow we get : -1500+2081.
Since this value is over 1, we accept this proposal to set up ToZ Industries.
Why is a value greater than 1 accepted and less than 1 rejected? Simply put, if the present value of our future cash inflows is greater than the initial investment, the project is considered worthwhile. For example, if we spend $1,500 today and generate a present value of $2,081 over five years, the investment is profitable.
Tool/Formula 2: IRR is the discount rate at which the present value of cash inflows equals the present value of cash outflows. It represents the project's expected rate of return. A project is typically accepted if its IRR is greater than the company's required rate of return. (Definition directly taken from online sources). Basically, this is the interest rate, at which our NPV (calculated above becomes 0)
I have attached a link to help you understand this better. Although the concept is straightforward, it can be a bit challenging to explain: https://www.investopedia.com/terms/i/irr.asp
In our case, the IRR exceeds 20%, which is significantly higher than the Treasury rate of 4.96% used earlier. Therefore, from a financial perspective, ToZ Industries appears to be a sound investment.
Tool/Formula 3: Payback Period
The payback period is the time it takes for a project to recover its initial investment. Projects with shorter payback periods are generally preferred, as they allow for quicker recovery of investment. (Definition taken from online sources).
Payback Period = 1500/480 = 3.125 Years. This means we to get back our investment in 3.125 years and then actually start making money
However, as you may have noticed, this formula is quite basic and does not account for the time value of money (i.e., the value of future cash inflows is always lower when expressed in today’s dollars). To address this, the Discounted Payback Period is used.
Tool/Formula 4: Discounted Cash Flow
Since we have already calculated the discounted cash flows earlier, I won’t be repeating the same calculations here.
Essentially, we divide the initial outlay by the discounted cash flows calculated previously. Based on that, you recover your discounted investment just after 3 years and 5.5 months.
There are many other tools used in finance to evaluate which avenues are suitable for making informed financial decisions. I will continue sharing them in this thread.
Be blessed, everyone. Money is a necessary tool for growth. I hope this helps you make more thoughtful and informed choices with your finances in the future.
As an initiate of the True Gods, you should always move forward with confidence and clarity in these matters.
Hail Zev
On Financial Decision-Making and Resource Allocation
In both corporate finance and personal life, sound decision-making around resource allocation—particularly money and time is important. Just as companies use capital budgeting techniques to evaluate the feasibility of long-term investments, I apply similar frameworks when making personal financial decisions. This approach has been instrumental in helping me manage current expenses while also preparing for the future in a sustainable and structured way.
One of the most important shifts we can make is to begin viewing both money and time as finite, strategic resources. They are tools meant to support our broader goals like achieving financial security and ideally creating the conditions for early retirement. Freeing up these resources can allow for deeper focus on personal aspirations, growth, and higher purposes.
While money is often viewed as a measure of value or even self-worth in many parts of the world, as Zevists, we recognize that money is not an end in itself. Instead, we understand it as a means : a resource that supports independent decision-making and gives us the freedom to align our actions with our deeper values and goals.
Of course, the ToZ teachings offer a higher level of reflection and should remain our primary source of knowledge and guidance. My intent here is simply to share what I have learned so far in hopes that it may benefit others in the community.
For those interested in diving deeper, there is a wealth of excellent financial knowledge available through books, courses, and online tutorials. I encourage everyone to explore these resources to complement their understanding.
Goal : Is to make money decisions and run your money affairs as businesses do
The ultimate goal of financial growth, in my view, is not luxury for its own sake, but freedom to live life on your own terms, to raise a family with care and presence, to deepen your spiritual practice, and to become a more complete, well-rounded human being.
Money is a tool, not an end in itself. Used wisely, it can empower us to escape survival-based living and invest in the things that truly matter: health, relationships, purpose, and self-actualization.
Unfortunately, the current system is structured in a way that keeps many people financially trapped. From misleading financial advice to consumer-driven distractions, the average person becomes a servant to money rather than its master. This is not only limiting but it is deeply harmful to individual and collective potential.
While I don’t claim to speak from a place of spiritual authority, I do recognize the value of aligning our material life with higher purpose. In that spirit, I defer to the experts and teachings that guide us spiritually. What I can speak to is the importance of economic independence not just for ourselves as individuals, but for our families, communities, and the legacy we hope to revive.
Let us not forget our ancestors were kings, generals, warriors, scientists, philosophers. It is not just our right, but our responsibility to rebuild that legacy in today’s world. Wealth, when directed with wisdom and integrity, can serve as a powerful force for personal sovereignty and cultural restoration.
Capital Budgeting: Have you ever wondered how multinational corporations generating billions in revenue manage their operations? What strategic decisions do they make when they have abundant capital, or conversely, when they face financial constraints?
In this discussion, we will explore these questions through a practical example, followed by formal definitions sourced from authoritative references such as ChatGPT and Google.
Definition: Capital budgeting is the process that businesses use to evaluate and decide whether long-term investments or projects are worth pursuing. These investments typically involve large amounts of money and are expected to generate benefits over several years. (Taken from Online Sources)
Recognize that you, like money, are a finite resource with limited time and opportunities available to you. It is essential to invest your financial resources wisely, understanding that returns often require time to materialize. As such, patience is a critical virtue in the journey toward financial growth.
Remember, life is not lived in days, weeks, or even years alone it is a long-term endeavor. Embrace this perspective, remain steadfast, and take proactive, informed actions to steadily build and preserve your wealth over time.
Examples of Capital budgeting decisions can include:
1) Setting up a new factory
2) Buying new machinery for your business
In terms of Personal Capital budgeting Decisions:
Capital Budgeting Decisions are decisions that have a life cycle of more than 1 year as has been discussed before.
AA) You buy a home with the intention of either living in it or benefiting from its appreciation in value over time.
B) You invest money in education with the expectation that your return on investment will justify the expense. For example, not spending $60,000 now on education may limit your ability to earn $120,000 or more in the future. (Remember, you don’t live for just a day : you are here for the long term.)
C) You buy a washing machine for $2,000 with the intention that it will save you time and energy, which can then be used for other purposes. There can be an emotional component to this decision, but another way to evaluate it is by comparing it to how much you currently spend on laundry and dry cleaning. For instance, if you pay $5 for a shirt and $6 for a pair of pants, and you have 3 shirts and 7 pants, assuming you get your clothes cleaned and ironed once every two weeks, your total weekly cost would be approximately $43.50. Over a year, this amounts to about $2,262. While these are just examples, they illustrate the math behind such decisions.
Formulas/Tools used to do this analysis:
Finally, it is important to remember that nobody can guarantee what the future holds. How things unfold depends on many factors. Therefore, we use projections for our analysis. But what exactly are these projections?
Referring to our previous example, we “projected” the costs of laundry for the coming year. Any projection is based on certain assumptions. Our assumptions, for example, were:
1) One key assumption is that you will remain alive throughout the entire financial year. While this may be said lightly, it is also a serious consideration encouraging you not to live solely for the moment.
In accounting, companies operate under the “Going Concern” concept, which assumes that the business will continue to operate indefinitely without any predetermined expiration date for winding down or liquidating its assets. This principle underpins long-term financial planning and projections.
2) That you will ensure to maintain hygiene and keep yourself and clothes clean and presentable ( For example, ToZ Industries manufactures talismans and clothing accessories that consistently meet high-quality standards and do not use inferior raw materials.)
3) That you always use the same dry cleaner (For companies, this can mean using a consistent source of financing that charges a fixed interest rate. For example, ToZ Industries, which manufactures talismans and other clothing accessories, works with a financier who charges 5% per annum interest on the loaned amount, compounded annually) or dry cleaners that charge the same amount for the services
Formula/Tool 1: Net Present Value
It is well understood that money tends to lose value over time due to inflation. When projecting future cash flows and discounting them to their present value, it is important to determine what the equivalent value of, for example, $20 received tomorrow would be in today’s terms.
Example: We spend $1500to set up ToZ Industries today.
So our present money (Year 0) = -$1500( Since this an outflow of money from our accounts)
From this aim to generate $40 monthly revenue projected straight for 5 years timeline.
This makes our yearly income come to: $480
This would make revenue for years 1,2,3,4,5 = $480,$480,$480,$480,$480
As of August 26, 2025, the yield on the United States 30-Year Treasury Bond is 4.90% For our calculations, we use the 30-year US Treasury bond interest rate as the discount factor. Essentially, this rate represents the opportunity cost of holding money idle each year instead of investing it in a Treasury bond.
The present value of these future revenues brought to Year 0 then becomes (This is known as Discounting Future Cash Flows)
Year 1 : 480/(1+0.0490)^1 = $457
Year 2 : 480/(1+0.0490)^2 = $436
Year 3: 480/(1+0.0490)^3 = $415
Year 4 : 480/(1+0.0490)^4 = $396
Year 5: 480/(1+0.0490)^5 = 377
This brings our total Revenue: $2081
Comparison of future Cash Flows in Present (Year 0) Values with the Present Outflow we get : -1500+2081.
Since this value is over 1, we accept this proposal to set up ToZ Industries.
Why is a value greater than 1 accepted and less than 1 rejected? Simply put, if the present value of our future cash inflows is greater than the initial investment, the project is considered worthwhile. For example, if we spend $1,500 today and generate a present value of $2,081 over five years, the investment is profitable.
Tool/Formula 2: IRR is the discount rate at which the present value of cash inflows equals the present value of cash outflows. It represents the project's expected rate of return. A project is typically accepted if its IRR is greater than the company's required rate of return. (Definition directly taken from online sources). Basically, this is the interest rate, at which our NPV (calculated above becomes 0)
I have attached a link to help you understand this better. Although the concept is straightforward, it can be a bit challenging to explain: https://www.investopedia.com/terms/i/irr.asp
In our case, the IRR exceeds 20%, which is significantly higher than the Treasury rate of 4.96% used earlier. Therefore, from a financial perspective, ToZ Industries appears to be a sound investment.
Tool/Formula 3: Payback Period
The payback period is the time it takes for a project to recover its initial investment. Projects with shorter payback periods are generally preferred, as they allow for quicker recovery of investment. (Definition taken from online sources).
Payback Period = 1500/480 = 3.125 Years. This means we to get back our investment in 3.125 years and then actually start making money
However, as you may have noticed, this formula is quite basic and does not account for the time value of money (i.e., the value of future cash inflows is always lower when expressed in today’s dollars). To address this, the Discounted Payback Period is used.
Tool/Formula 4: Discounted Cash Flow
Since we have already calculated the discounted cash flows earlier, I won’t be repeating the same calculations here.
Essentially, we divide the initial outlay by the discounted cash flows calculated previously. Based on that, you recover your discounted investment just after 3 years and 5.5 months.
There are many other tools used in finance to evaluate which avenues are suitable for making informed financial decisions. I will continue sharing them in this thread.
Be blessed, everyone. Money is a necessary tool for growth. I hope this helps you make more thoughtful and informed choices with your finances in the future.
As an initiate of the True Gods, you should always move forward with confidence and clarity in these matters.
Hail Zev
