Bobby Bonilla day

Published in The Sunday Times on 28th June 2026.

Here’s a concept that shouldn’t blow your mind. A euro today is worth more than a euro in a year’s time. It can be invested and earn a return, so you should prefer money today versus the same amount of money anytime in the future.

This concept is known as the time value of money. It is not an overstatement to say that it is central to everything in finance. It underpins almost every financial decision.  

Someone who well appreciated this concept was a famous baseball player called Bobby Bonilla.  He was one of best batters in the sport back in the 1980s and 90s. A six-time All-Star and a World Series champion. 

For New York Mets fans, however, his legacy inspires little nostalgia. Instead, he is remembered as the player linked to what many regard as one of the worst contracts in baseball history — a deal the Mets agreed to and have been paying for ever since.

In 2000, Bonilla was past his prime, but under his contract, the Mets still owed him just under $6m for the final year of his contract. Keen to redeploy resources toward a competitive roster, the Mets opted not to pay him immediately. Instead, they agreed to defer the payment — spreading it out over future years with interest.

Bonilla agreed that instead of $6m immediately, he would accept deferred instalments over twenty-five years of $1.19m, starting July 1st 2011.

July 1st is now known as Bobby Bonilla Day. It rankles with Mets fans. Bonilla retired a quarter of a century ago — and the Mets still owe him ten more million-dollar-plus paydays. The total payout under the deal will be just shy of $30m. 

Before reading on – do you think the Mets were crazy to strike this deal with Bonilla?

The Planet Money podcast did a deep dive on how the Mets found themselves paying someone almost $30 million to not play baseball. In short, it’s a bit of a shrug. It wasn’t shockingly favourable to either party.

The $6 million with 8% annual compound interest, grows into exactly the amount of money the Mets owe Bobby Bonilla. At the time the deal was struck interest rates in the US were 6%, so 8% wouldn’t have raised too many eyebrows.

It seems contrary to all logic and reason that $6m now could possibly be worth $30m later. The first lesson here is that most people do not understand the power of compound interest.

There’s a handy rule in finance called the rule of 72. This shortcut estimates how long it takes for money to double. Divide 72 by the rate of return: at 8%, investments double in about 9 years. It’s a simple way to understand compounding and compare returns across different investments quickly and intuitively. In 2000, $6m will double to $12m by 2009. By 2018, $12m will have doubled to $24m. So you can see how 6 becomes 30 - a few decades and an annual return in the high single digits works wonders.

For Mets fans, July 1st is like a day of mourning. They are outraged and feel like the Mets got completely screwed. They didn’t.

Every investment decision is, at its core, a choice between having something today or more of it tomorrow — with uncertainty in between. The best definition of investing I’ve read comes from Warren Buffett who said “Investing is forgoing consumption now in order to have the ability to consume more at a later date.”

If you truly understand the time value of money and compound interest, it should fundamentally change how you think about every financial decision.

There is a twist in the tail of the Bonilla/Mets story.

The Mets used the money they didn’t have to pay Bonilla to strengthen its roster and reached the 2000 World Series (though lost to the Yankees). We can’t be too critical then as it hard to ascribe a value to this.

What we can be more critical of, is the assumptions they made in agreeing to the Bonilla contract in the first place. The Mets thought they could earn 10–12% annually while owing Bonilla 8%.  The deferment would not only ease short-term cash flow constraints but also create a profit over time, they mused. The Mets identified a manager that had been generating returns of this order in a low-risk way. That manager’s name was Bernard Madoff.

The Mets lost a significant sum to the largest Ponzi scheme in history. As wonderful as the effect of compounding is, there’s an equally pernicious impact from losses. Lose half your money and you need 100% to get back to par. Lose it all – and you begin to understand why Mets fans mourn the 1st of July. 

Gary Connolly is Investment Director at Davy. He can be contacted at gary.connolly@davy.ie or on X at @gconno1.