Most lumberyards offer a discount for early payment. It’s usually described as “2% 10/net 30,” which means that if you pay by the 10th of the month, you get a 2% discount; if you pay between the 11th and the 30th, you pay the full amount. (If you pay after that, you may pay penalties and interest.) In a session at this year’s JLC Live conference in Providence, R.I., Leslie Shiner, owner of The Shiner Group, a small-business consulting and training company based in California, explained that this amounts to a 2% discount for 20 days. Here’s how she thinks about it.

Imagine that you’ve deposited $100 in a bank account and, after 20 days, you have $102. You take the $2 and put it in a cookie jar (to keep things simple, we’ll ignore compound interest). After 20 more days the $100 you left in the bank account has again grown to $102, and again you put $2 in the cookie jar, which now holds $4. If you do this...

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