Opportunity Cost

There some opportunities which we misses out by choosing the alternatives . Every moment we are making choice one over another. We lose something in order to gain something. The more you gain, the more you lose. Figuring out a balancing way is the key be it in business or in life.

Assume an expected return on stock A is 100 % for the next 3 years and stock B is 60% over 18 months. Which stock will you invest in? Probably, you may straight jump to the ace card, A, seeing a whopping 100% return. Well the choice depend on your present situation. If you need money in next one and half year. It would be wise enough to invest in the second stock.

Suppose you want to buy a car now. It is worth of 20 lakhs. At the same time, you can wise use this money and double in in due of course of time. After all, a million today is worth of 10 million a couple of years later if used wisely. So in the car example the opportunity cost is more than 20 lakh, If you utilized the fund properly and doubled it you have 40 lakhs. On the other hand if you bought the car, it will be worth less than 20 lakhs the next moment.

As Benjamin Franklin said, “Time is Money”

If we are not using time wisely now, we are losing an amazing opportunity that we might have attracted in future. The seeds we sow today are plants next year. Money may return too, but time would never return. Spend it wisely.