Opportunity Cost

The value of what is given up when making a decision.

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Key Insights & Principles

Decision Making

1. Saying 'yes' to something means saying 'no' to other possibilities.
2. 'No' is the opportunity to make room for something more valuable.
3. Knowing what you value is important.
4. Time and energy is finite. The cost of not allocating them effectively is significant.
5. Over analysis of alternative opportunities has costs.
6. A good failure is often a fast one.

1. When making decisions, consider what you are giving up.
2. Know your personal values.
3. Don't get bogged down in discovering alternatives.

Personal Finance

1. Opportunities can be missed by spending money.
2. It is costly to not consider what we are giving up when we spend money.

1. Consider alternatives whenever making financial decisions.
2. Teach kids about opportunity costs when teaching about money.

Business

1. For a startup business, time is very valuable.
2. Success in business puts more importance on being able to choose effectively between alternatives.
3. Taking no action has a huge opportunity cost.

1. Don't spend more time or money on what isn't working.

Book References