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Showing posts with the label alternative costs

Just my thoughts #0813

Longing: A lonely heart can be filled by someone, but a longing heart is a heart that cannot be filled by ‘the particular person.’ When the mind feels strange, it is important to first determine whether the feeling stems from a lack of self-generated needs or from not being filled by the object of longing. Loneliness can progress easily, but longing carries a high risk of self-destruction if not handled carefully. - Joseph’s “just my thoughts”

Just my thoughts #0070

In business, capital means business funds. A successful entrepreneur often says, "I started my business without any capital". It's partly true, but it's a lie. The entrepreneur just said that capital means only cash. However, all kinds of businesses need to be fundamentally business funds in any even not cash. The entrepreneur didn't count the founder's labor cost. No inputs, no outcomes. The uncounted labor costs are called "alternative costs" or "opportunity costs". This comes from comparative advantage. If the entrepreneur doesn't accept the uncounted labor cost as a debt, the entrepreneur is equivalent to losing the profit due to opportunity costs. Please always remember this. There is no free lunch in this world. - Joseph’s “just my thoughts”