Sunday 12 September 2010

Non-existence of Opportunity Cost


Would you get annoyed with yourself because you didn’t make the most out of something or stepped back from an opportunity? 

No good beating yourself up and start hating yourself because I don't think it will help, it would only make you feel worse than already is.

Instead, I think you can consider to be brutally honest and ask yourself what you have gained from the situation and what you lost out on, then deduce what you would do differently the next time.

A person who leaves $10,000 in a bank denies herself the dividend that could have accrued by investing the $10,000 on a stock. 

The opportunity cost of the decision to place the money in the bank, would be the value of the dividend. 

That is - if you get paid dividend, but everyone knows there's no guarantee.

Say if you get presented another chance to invest.  Would you do the same?  The thing is:

Some opportunities might never return.
And hence opportunity costs can never be earned. 

Why didn't I think of challenging the Economic opportunity loss taught in my degree?  This could well earned my way to a PhD in Economics!





 

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