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Showing posts with the label alternative costs

Just my thoughts #0733

People recognize that perfection is a worthwhile trait, and everyone strives for it. However, humans cannot attain perfection, and we must admit that pursuing it can cause major setbacks. Imperfection and immaturity often make others more empathetic. No matter how excellent or meaningful something is, if a person rejects it, it won’t be helpful. The empty space in a picture provides us with relaxation and comfort. Nobody likes stress. Children are seen as adorable and lovable because their surroundings are spacious and clean. Emotions flow into empty space. - 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”