Actionable

Finance What is opportunity cost All right Opportunity cost the

value you forfeit by choosing a path a over path

be and path a end or b can mean doing

nothing at all right Here's an example Opportunity cost people

Let's say you have a choice of taking two jobs

One is a safe steady gig with ibm You have

to commit to working there for twenty five years But

the big blue boss has promised that at the end

of that time period you'll get a good watch and

a million dollars twenty five years and a million bucks

and a reasonably decent lifestyle with low risk All right

well that's half a two years into the gig You

notice that a lot of your friends are whining about

taxes and they're buying porsche's You're still paying off school

loans working for ibm there Then ten years later your

friends or buying jets What happened Well they went to

work for a risky start up in silicon valley and

got stock options And of course you think we'll shoot

Where can i get me some of that Well you

committed to the safe steady big blue for twenty five

years you uh paid them with your commitment And in

the process you gave away other opportunities You might have

had teo make real bank by your own jets The

opportunity cost of your desire for a nice safe job

cost you big If you had been lucky enough to

get a Job at 1 of those hot startup you'd

be flushed with cash today just like your buddies All

right Another example And this happens to be a common

google interview question You win two free front row tickets

to a sick poppy's concert which sell on stubhub for

a thousand bucks each You decide to go to the

concert How much did the tickets cost you They were

free You say uh no You could have taken ninety

seconds fill out stub up form and gotten too grand

just selling them You chose not to receive the two

grand go to the concert instead which in a land

of opportunity cost lost is the same as paying two

grand for the tickets In other words money earned and

money lost It is not just counted by the dollar

bills that flow in between your fingers It's the value

in opportunities you take and in the value of the

ones you miss So when you see an opportunity take 00:02:04.09 --> [endTime] it especially if it gets you frequent flyer miles