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Showing posts with the label alternative costs

Just my thoughts #0638

Marathon runners rarely smile before, during, or after the race and usually have a very serious expression. If there were aliens, everyone who participated in the marathon might be considered a criminal because they don’t look happy. Humans think they only enjoy happy and joyful work and avoid hard, painful work, but in reality, human motivation is more complex. Even if something is hard and painful, it’s not as simple as just participating in marathons. Humans do not act solely based on joy and happiness. If humans can find meaning in life and experience progress even when it’s difficult, they are willing to do it. - 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”