Shine With Grace

When I learnt the concept of opportunity cost in my Economic class in high school.  I didn’t realise it then, but it is indeed a concept that not only applies in Economics, but in our every decision and action.

Opportunity cost

Opportunity cost, by definition, is the best alternative forgone.

As resources, including and especially time, is limited, when we choose to do something, we unavoidably forgo the opportunity of doing something else.

For instance, if you choose to watch programme A from 7 to 8 pm, by default you give up watching programme B (or serfing on the net, or going shopping…). 

Theoretically, the value you gain from your choice should be higher than that of any of the alternatives.  But in reality, it is not necessarily so…

Since not all things are created equal, make your choices wisely.

In investment

Say you have $100,000 cash spared, what investment would you choose?  Just leaving it in the savings account, invest in the stock market, bonds, funds? 

In career 

Every career choice has an opportunity cost.  When you choose one profession, you can’t be in another.  When you choose to stay in one company, you give up the rest.

In love relationships

Need I explain this?

How to make wise decisions?

When we make decisions, we always think that we’ve picked the right choice.  Nevertheless, from time to time we regret - therefore we would lament, “I should have bought that stock”, “I should have quited this job”, “I shouldn’t have married him”…  Of course, for many times external factors affect the desired outcomes of our decisions.  But, is it possible to minimise “wrong decisions in hindsight”?

• Know what you want (and what suits you) - Do you know what you really want?  If you don’t know what you want, you can easily lose direction and just follow the mass, or the advice your friends / family / stranger give you casually, and end up picking the high-risk fund that leaves you many sleepless nights, or the profession that you hate on a daily basis, or giving up the girl whom you really love…
• Make conscious choice- This may sound obvious.  But making choices randomly is the usual mistake that we easily commit.  For how many times do you make choices out of convenience?  Handy doesn’t mean suitable, especially in the long run.
• Educate yourself - You need to be literate in some (if not all) areas to make right decisions.  For instance in investment - do you have the knowledge and information to make the right decision?  For the same $100,000, given time you can grow it into $1M if you know how to invest - which stock to buy, what investment to avoid, when to buy and when to sell; or you can loss it all… 
• Understand the real meaning of risk - Seeking security may be a human nature. Nevertheless, what you think is safe may not be the most secure.  Say, you heard people saying that buying government bonds is safe.  Yet, as the USD is depreciating, you are indeed losing money if you invest in bonds (not to mentioned when compared to investing in assets in other currencies, remember the opportunity cost we are talking about?).   Or, you picked a job that is stable, in which you have no passion at all, is it safe or risky, if you can’t really perform well in it?
• Follow your heart - You may have taken all factors into consideration and still can’t make the decision.  At this juncture, I would suggest you trust yourself and follow your heart, listen to that little voice that keeps nagging you.  You subconscious can make right decision for you.

Related posts:

• Why You Should Do What You Love
• Expose Yourself To Things You Don’t Like
• Work Smart - And You Don’t Need To Work That Hard!
• I Didn’t Know How To Get There When Started
• Are You Working For Work’s Sake?

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