What does purchasing future cashflows imply for investors?

Purchasing future cash flows means that investors are looking to receive payments or returns at a later date rather than immediately. This approach is foundational in various investment types, including UITFs, as it involves understanding the value of money over time. By investing in future cash flows, investors expect to benefit from accrued interest or profit generated by investments made today that will yield returns in the future.

For instance, in the context of UITFs, investors may buy into a fund that invests in assets expected to provide returns through interest payments or dividends that will be distributed at a later date. This aligns with the time value of money, where cash flows in the future are considered in terms of their present value and potential growth.

Investing only in immediate returns focuses narrowly on short-term gains, which does not capture the rationale behind future cash flow investments. Similarly, creating a savings account does not directly relate to the active investment in cash flows that are anticipated in the future; it's more about storing money for safety. Lastly, spending all available cash contradicts the fundamental strategy of investing, as it does not involve holding onto assets for future gains.