BIF Bites: The Superbowl of CFP® Topics

Jerry and Kaylee welcome Tiffany Guy to the BIF Crew in this episode of The BIF Bites podcast. In this Super Bowl-themed episode, the trio connect financial concepts to the world of professional football to bring clarity to time value of money, behavioral finance, and the self-employment tax. 

Refreshing Concepts

Before you listen, we're providing a bit more context below so you better understand the concepts and examples that Jerry, Kaylee, and Tiffany provide in the episode. 

Time Value of Money

Need a refresher on the time value of money before listening to the episode? The time value of money is the idea that a dollar today is worth more than the same dollar in the future because today's dollar can be invested to earn a return and will also avoid some loss of purchasing power from inflation and risk of non-payment.

Basically, if you have money now, you can invest it and earn interest or returns so it grows over time. And, inflation means prices tend to rise, so a fixed amount of money usually buys less in the future than it does today. Kaylee ties this concept to purchasing tickets for the Super Bowl and how much a client may be missing out on in future returns. 

Behavioral Finance

• Sudden wealth syndrome: Athletes are just one profession where an individual may come from a less affluent background then suddenly shift into a high-income role where they experience difficulty in managing their money, plus they may have guilt, stress, or confusion about this change in financial circumstances. 
• Herd mentality: Herd mentality is similar to peer pressure, but it may be more of an internal pressure. Think "keeping up with the Jones'" in that if your neighbor or co-worker updates their house or buys a new car, you may feel pressured to keep up even when this is against good financial judgement.
  
  

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