26 December, 2013

1-5-14 finance: Opportunity cost

In everything in life, when you make a choice you give up A LOT of choices that you can take using the money, time, effort that you are going to dedicate for that particular choice. You just see that it is worth it to sacrifice all the other choice in favor of that choice

-          It is about the value of the "next best alternative".
-          We don't tend to thinks about the things that aren't there in front of your eyes, things that may be too important to ignore
-          There are always choices and alternatives:
-          Take time to look for every choice out there.
-          Study the value of each choice you have in terms of time, effort, likeness, resources … etc. The more you incorporate factors in the comparison, the better choice you are gonna make
-          The financial look gives you the only real logical, non-doubtful measure that would greatly help you to make the rational decision. It is a very important side to consider in the business, if not the MOST important, considering that we are talking business here

Sadly, you can't take all available options. You have to make a choice. Study your options well and take the best thing out there for you