Opportunity Cost
This is a preview of a concept contained in The Personal MBA by Josh Kaufman, a book that will help you master the fundamentals of business, hone your business instincts, and save a fortune in tuition. The Personal MBA distills the most powerful principles of business and delivers them quickly and concisely. Order your copy now…
What is “Opportunity Cost”?
“Business, more than any other occupation, is a continual dealing with the future; it is a continual calculation, an instinctive exercise in foresight.” — Henry R. Luce, publisher and founder of Time Inc.
Key Points:
- Opportunity Cost is the value you’re giving up for making a Choice.
- Whenever you invest time, energy or resources in something, you are also choosing not to invest it in something else.
- Opportunity Cost is important because it’s hidden. Paying attention to what you’re giving up helps you evaluate your decision.
- Don’t obsess over your Opportunity Cost. Don’t try to analyze everything, just consider what appear to best alternatives at the time.
Questions for Consideration:
- Examine your current investments of resources, time, and energy – are there opportunity costs you haven’t considered?
- What are some potential options that may be better investments?
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