Skip to main content

Posts

Showing posts with the label opportunity costs

Just my thoughts #0544

Making money, growing money, protecting money, and using money wisely are different issues. Being good at one does not guarantee success in others. The important thing is to earn, grow, and safeguard your money, and then care for the people around you. To win money at a casino, you just need to observe the successful winners and replicate their actions. You cannot engage in economic activities alone; you need a business partner to earn and manage money together. While it is possible to go solo, you may struggle to expand beyond a certain limit. That doesn’t mean I ignore the poor. If there are needy individuals around you, they might come to you to borrow money, or you might help them at some point. If you try to thrive on your own, it will be challenging to retain your wealth. You can safeguard your money by helping those around you become prosperous as well. However, some people disregard this idea. A person who believes in the power of money often flaunts that power. When these peop...

Just my thoughts #0303

We often overlook the financial concept of “opportunity costs” because there is no immediate cash expenditure involved. Typically, we invest more time and effort in purchasing cheaper products. In contrast, wealthy individuals do not have to exert as much effort as those with fewer financial resources. When we factor in opportunity costs, we often find ourselves spending a similar amount of money on the same items, regardless of wealth status. For instance, if Bill Gates picks up a dollar that someone has dropped, he actually detracts from his financial standing due to the opportunity costs associated with the value of his labor. In this regard, he might save more money by choosing to rest instead of working. Ultimately, opportunity costs are the hidden expenses that can keep us in financial distress in the real world. - Joseph’s “just my thoughts”

Just my thoughts #0132

Google founder Sergey Brin, one day asked a great question. “What will happen if we give this service for free?” The result was, as we know well, “MONOPOLY”. Google gives employees 100,000 meals a day for free. This is because Google found that providing free meals is more profitable for the company. Initially, a payment system was introduced in the cafeteria. Soon, however, Google changed its mind when it saw the people waiting in line. Google learned the “opportunity cost”. Google's technology is excellent, but they realize it is not about making money. Fate changed when they discovered that the Business Model for that technology made money. - 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”