What is Opportunity Cost?
Every single decision you make comes with an associated cost, whether you see it or not. Time or sacrificed activities are the price you’re paying.
Opportunity Cost Examples:
Here are some prime examples of opportunity costs that an average person would be happy to pay:
- Waiting in line for hours to buy a new product on launch day
- Driving an additional 20 minutes to save a few dollars at a cheaper petrol station
- Filling out a lengthy online survey to receive a free _____
I personally would not agree to any of the opportunity costs above, because I value my time greater than the few dollars that can be saved or being able to say you’re the first one to get the new product.
Regardless of what you’re gaining or doing, something else (another opportunity) is being lost – weigh up your options before you rush into things.
Benefits From Assessing Opportunity Cost:
Assessing opportunity costs will allow you to ensure you’re utilizing your time as effectively as possible. Quite often, a decision which sounds attractive initially comes at a price you may not have been willing to pay.
Assessing opportunity costs will have you thinking logically and will reduce regret as you will no longer rush into situations.
My Experience With Opportunity Cost:
I used to just think about cost in terms of dollars and cents. As I began to implement successful habits into my life, I quickly realised that money wasn’t my limiting factor – time was.
Hanging out with negative people (specifically insecure people as I mentioned earlier) may not seem like a big deal, but when you actually look at the opportunity cost, it can ruin your life.
By associating with those negative individuals, you’re not only losing time that could be used discussing ideas and networking with successful, positive individuals, but you’re also getting sapped of any motivation, drive and energy you have – I speak from experience.
An example of the opportunity cost of me going to the movies would be the same as that if I were to go out for a meal or go rock climbing with friends (in terms of time and money cost, these are extremely close).