Opportunity Cost – May 6, 2018
For much of my adult life, I’ve been a bit of a finance and economics nerd. I rarely consume the news, but I spend an embarrassing amount of time pouring over personal finance / investing blogs and economic publications. I’ve got a problem, I’ll admit it, but through my own experiences in life, I’ve come to strongly believe in the importance of understanding how the decisions we make are economic calculations that have compounding effects over time.
One of the most powerful economic concepts that we’re all touched by, whether we realize it or not, is opportunity cost. Opportunity cost is the benefit you don’t receive by using your resources on something else. As a basic example, if you’ve got 3 hours to kill before work, you can watch a movie or go on a hike. If you choose to watch the movie, your opportunity cost is the benefit you give up from not going on the hike (fresh air, exercise, maybe a great story of a wildlife encounter). If you choose to go on the hike, your opportunity cost is the benefit you give up from not watching the movie (laughs, tears, creative inspiration, entertainment). We often weigh decisions by choosing which experience or opportunity we’ll regret missing out on most.
We make these calculations everyday, with every decision we make, no matter how impactful or trivial they may be. If you’re on your way to a summer seasonal job right now, you’ve already weighed the opportunity cost of your alternatives (staying in your current job, staying in your hometown for the summer, going to summer school, etc.) and decided that a summer in an amazing place with new amazing friends is the experience you would most regret not having (we at CoolWorks would tend to agree!).
Whatever you may be doing this summer, we want to encourage you to continue to be aware of the power of opportunity costs to get the most out of these precious, all-too-brief summer months. Is it worth missing out on an after-work sunset hike right now because you’re tired and feel like a nap? Will the new $200 space grade astro fleece hiking kilt really enhance your outdoor experiences that much, or would you rather have that money to go towards a trip to Thailand when the season ends? (Or, if you’re a Scrooge like me, would you rather save the $200 because you know, thanks to compounding, it’ll be worth $431.78 in 10 years, at which point you’d be able to buy an even better hiking kilt!?)
We make an abundance of decisions everyday, and every decision has compounding effects. Ten years from now, will you have fond memories of that great after-work nap you took in lieu of hiking out to watch the sunset over the mountains with friends? Will you still be rocking and loving your $200 hiking kilt when you drop your friends off at the airport as they head off to Thailand for 2 months? The answer to either of those questions could very well be “Yes!”, and if so, you’ll know you made the right choice. The point is, every decision – financial or otherwise – is an investment in the future. An experience today grows to be a story tomorrow and a memory in the years to come. Our time is our most valuable and finite resource. Invest it wisely!
Are you looking for some extra help, guidance, or inspiration? We’ve developed and regularly update a number of job seeker resources to help support and inspire you on your journey. Check out our Job Seekers Guide, Help Center, and CoolWorks Journals for an abundance of advice, tips, and inspiring stories to light your path to Jobs in Great Places!