It was about Opportunity Cost, defined as the cost of not being able to do something because you are already doing something else. He gives a business example based on a commitment to building a product that ties up staff who are then unable to respond to a better deal that comes along. This struck me because he quotes Gretchen Rubin, whose Happiness Project blog I read daily. She said,
I also try to ignore opportunity costs. I can become paralyzed if I think that way too much. Someone once told me, of my alma mater, “The curse of Yale Law School is to die with your options open” meaning, if you try to preserve every opportunity, you can’t move forward.
|I got this graphic from Wikipedia, but my preferred picture would have|
been this one.
I'm thinking I don't properly understand this concept, because it does seem to me that there are many applications of this principle for me, worth giving attention when making choices about my three limited resources: time, money & energy.
- If I spend all my money on fun stuff, I may have lost the capacity to pay an unexpected bill.
- If I spend all my time reading blogs, I may have lost the daylight to go for a run.
- If I go for a very long run, I have to accept that I will likely not have much energy left for much else (at least until long runs are normal again).
I think the opportunity cost concept is looming larger for me of late because of getting older. I'm conscious that there will likely come a time when Bill and I are not up for long haul travel. I'm saving cruises for then, I think, where everything is done for you; assuming, of course, that we will still be able to afford them.
Do you find yourself using or ignoring the concept of "Opportunity Cost" in your everyday life?