Every choice has a price.
If you have $100 to invest and you buy this stock instead of that bond, the interest you gave up in making your choice is your opportunity cost.
At the dinner buffet, you can take as much food as you like, but you can only consume so much food. Which means that eating the jambalaya means you won’t have room to eat a dosa. That’s your opportunity cost.
Opportunity cost is the key to making decisions. Once you know the value of the alternatives you’re giving up, you can be smarter about what you’re choosing to do.
Time is finite. We only get the next hour once, and then it’s gone forever. So choices about how we spend or invest our time come with real opportunity costs.
A car with a bumper sticker that says, “I’d rather be surfing,” tells us a lot about the driver (including the inconsistency of his or her actions). But it’s proof that each of us wrestles with opportunity costs every day.
With that in mind, the cost of watching a cat video on YouTube is real indeed.
And the internet has raised the opportunity cost of time spent.
Our access to the world of learning and online resources means that the alternatives are far more valuable than they used to be.
You’re about to spend 11 minutes perfecting an email to a customer. You could do a 90% ideal job in one minute, and the extra 10 minutes spent will increase the ‘quality’ of the email to 92%.
Or perhaps you’re about to spend an hour manually cleaning a database or tweaking some image files. You do this every day.
Today, though, you could invest an hour in learning to build a macro that will do this recurring job in just a minute a day from now on. Or you could figure out how to hire a trusted freelancer who will do the job on a regular basis for far less than it’s costing you to do it yourself.
Next week, the choices you made at the buffet won’t matter much. But if you learn a new skill, you own it forever.
Human beings don’t like thinking about opportunity costs. As they approach infinity, it’s easy to get paralyzed. As they get harder to compute, it’s difficult to focus and be mindful of the choices already made. That’s a challenge.
But worse, far worse, is to ignore them and fail to learn and connect and level up.