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The opportunity cost

Discussion in 'Investments' started by remnant, May 12, 2016.

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  1. remnant

    remnant Member

    For every investment you make, there is another one you have overlooked. In other words, you shut yourself to other possibilities by choosing a particular investment line. This is the opportunity cost. Most people reckon with it belatedly after making poor or inferior investment choices. One should take time and even commit resources to educate oneself with regard to any investment choice they intend to make. I believe that everyone of us has instances where the opportunity cost anguished their souls after making a wrong turn.
     
  2. That is an interesting way of viewing the world. But isn't that life, if you go to college to be a doctor, you probably aren't going to become a lawyer. If you choose to invest in your time in your company you might lose time with family. It's because there is a limit to time and resources. I find that it is best to look at as many possible investment lines or choices and pick the one that is the most doable and maximizes the potential benefits for its cost. That minimized my regret later, even if it doesn't work out. If I was unaware of a investment choice until later, i don't regret it. I think most people make poor or inferiors investment choices out of two basic reason, not enough knowledge and/or emotions. When making investment choices, there is a difference between doing something because your like doing it and doing something that needs to be done because it will help you in the future. As your business grows and your knowledge, the opportunity cost gets minimize because you have more resources to work with whether it is money, employees, connections, power, and skills.
     
  3. ruener79

    ruener79 Member

    I haven't heard of this word since I left university days years ago. As the previous comment mentioned, however, way things go, there will and always will be an opportunity cost to every choices. The very nature of time and resources does make opportunity cost a living reality. Thus, the best way to handle it is really to minimize the possible loss. That's what we all people do, whether we realize it or not. We choose those we think will afford us lesser loss.
    This concept should NOT be approached simply. It is just not about losing one thing because of a choice for another.
     

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