Have you ever wondered? What is the cost of your opportunity?
Your time is expensive, perhaps priceless to you, so you’d better use it the way you best know how.
Although, opportunity cost is best known in economic or business terms, it has a deeper meaning and application in our lives as well.
The most simple way of understanding opportunity cost is to understand what is the trade-off. If you decide to do A to gain X, what are you not doing in B and losing out on Y. And yet, you are fine with that decision!
Every decision you take rides a trade-off horse. You must evaluate what are you giving up to gain what. If not this, what else could you be doing that offers you the best opportunity. When you invest in yourself or a business, the question is, if not here, where could you have invested this time or money to benefit. Further, if you have resources at hand, what could you do to capitalize on them in a given period of time?
An opportunity cost exists for not just your professional time, but your personal time as well. And for that matter, when we say cost, it’s not always about the economics of it, but also what you choose and love to do. If you decide to become a doctor just because you can earn more, when your true passion lies in let’s say, art, that’s not a true justification of opportunity cost, because you will spend a lifetime doing something you don’t really love, though you may make a good living off of it. In this scenario, you will go through life dwelling on what you could have been and done, provided you pursued your passion. Hence, your decisiveness can help drive your opportunities to be in line with your likes and passion.
Every choice has a consequence and you need to be aware of that when making decisions. It’s no one else, but you who has to live with those consequences. Our lives are sum totals of the decisions we took & continue to take, the choices we make. We must hence, evaluate options thoroughly before making a decision and once a decision is made, we need to ensure we are ready to face the consequences and never look back in regret. That is the mark of a sound mind.
Every action & inaction has a cost associated with it. Time never stands still and that’s the first of those costs. Your time is so expensive that you’d better use it the best way you possibly can. If you are sprawled in front of the television for hours and feel wasted, its time to get up and do with your time what makes you feel productive, lively, and good. Bring that one subtle change in your life and rest assured, you are on the right track. For instance, you are here hearing me now when you could be doing something else. You have made the choice to hear me out. Now that you have chosen to do so, the best you can make use of this opportunity is to apply what you have learned and as a result, make this time useful for you and the lesson valuable.
When you evaluate the opportunity cost of every decision you take, in monetary and non-monetary terms, decision making does become easier and life change patterns do emerge to happen with you based on your decisions. Every choice has a cost, the cost of what you are forgoing to choose this over that. Nothing in this world is free.
Our lives are all about priorities and values we strive to uphold. Choosing one thing over another means you have sacrificed what you gave up to stick with the chosen decision. When you have to make a choice, you need to evaluate alternatives in comparison. There is no way around it. The cost of passing up on the alternatives for what you have chosen is your opportunity cost. Make the most of your choice.
When you go to college and choose to graduate after spending 4 years of studying, the tuition you paid and the time you spent studying, all of them make up the costs of pursuing the opportunity. Yet, you do it because you believe that after graduation, you will be paid off by way of a better job and income. Instead of picking up a job for the last 4 years, you chose to study further and forego income for those 4 years because you believe you can make more in the long run post your graduation.
Decisions, big or small; all of them carry the hidden costs of the options you decline. Such evaluation of alternatives allows you to make a rational assessment of your choices before going with one.
In life, find your rudder, one thing that you understand well, and are good at. Once you have that, then every opportunity that you come across should be in evaluation of what you currently have and truly understand. Why, because that’s your opportunity cost of pursuing something else. This will make it easy for you to make decisions quickly and also, over time your expertise develops whether you continue to stick to what you know or venture out to try new things, one step at a time. You will eventually find that there are one or two things that you are better at than anything else. And that’s where you will find your success.
Evaluate life choices using this policy and you will understand what’s at stake better. When you define opportunity cost as the central parameter of the choices you make, you will understand what you can do with your time, money, and resources. And when this aspect becomes a part of your thought process, your decision-making process, you will not only make sound decisions but, will also understand the world in which we live, better. Opportunity costs shape your personal and professional life. It impacts all aspects of your life: time, money, career, home, family, lifestyle, etc. Hence, make wise choices and once a choice is made, don’t look back!
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