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Showing posts with the label alternative costs

Just my thoughts #0670

Joy and resentment are emotions, but they carry energy. That energy greatly influences my life. The lesson adults teach about not making enemies is based on their own experience of that influence. When we go to court, we often see many people there because they harbor resentment, whether in civil or criminal cases. That demonstrates the power and impact of resentment. Ignoring emotions will eventually have consequences. Don’t make enemies; instead, always choose to share joy. - 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”