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Showing posts with the label alternative costs

Just my thoughts #0734

1 + 1 = 2 is an unchangeable mathematical fact. However, in real life, there is a synergistic effect that can make the calculation result 3 or more. Therefore, even though we believe and accept certain axioms, there may be cases where they do not always hold true in extraordinary circumstances. One such case is the belief that reason exists as the opposite of emotion. Perhaps reason is not the opposite of emotion, but rather a part of it or a different form of emotion. How can we classify reason and emotion? The reason we recognize might actually be logic that originates from emotions. There is certainly a concept called ‘reason,’ but its true nature may be unknown to us. Ultimately, emotions will likely dominate our existence. - 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”