​Investment - Present Value and the Valuation of Financial Instruments
People invest in financial products and instruments because they expect to gain future rewards in the form of future cash flows. These cash flows can be in the form of income, such as dividends and interest, from the repayment of an amount lent, or by selling the financial product or instrument to someone else.

An investor is exchanging a quantity of money now for future cash flows, and some of these cash flows are more uncertain than others.

The following timeline demonstrates why people invest money in the now and what they may gain in the future 

Today Investment
People invest so they are able to afford the things they desire in future, such as buying a car, a home, bringing a child to school, saving for retirement, etc.

T + 1 Returns
When people invest their money, their money can generate additional money by earning interest on what they have put away. The principle of compound interest creates interest on both interest and the original cash outflow. 

Future Future Cash Flows
The value (amount traded) of a fairly priced financial product today should equal the present value of its predicted future cash flows.