The Time Value of Money is a mathematical concept that states, in general, that a dollar today is more valuable than a dollar tomorrow (or any date in the future). So, how is this relevant to placing action with your hard earned dollars? The concept of Time Value of Money applies to futures bets.
Let’s say you are looking at a season win totals number before a season starts. Typically, a football season lasts 5 months or so. Baseball is roughly 7 months. A basketball or hockey season is approximately 8 months. There is only so much money in your bankroll. Applying the Time Value of Money concept would state that you are better off placing action on shorter term outcomes (such as single games) than you are waiting for an entire season to end to collect your winnings.
The concept is that placing action on a single outcome that ends in a significantly shorter time frame will allow you to reinvest those proceeds in future endeavors. Does that mean you should never place futures action? Not necessarily. There are still places to consider placing this type of action. The best illustration is on plus-money payouts.
If you can find a season future that offers plus money (ie +140, etc) then you are being compensated for the Time Value of Money. In the reference above, you are earning a 40% return for the 4-8 months of waiting for the payout. This can help offset the loss of reinvested future earnings by taking single games at -110. So, the next time you are looking at season futures, remember how it can impact your earnings potential by having your funds tied up for the duration of a season.
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