{"id":2955,"date":"2024-06-11T16:33:30","date_gmt":"2024-06-11T16:33:30","guid":{"rendered":"http:\/\/localhost\/dpetkovski\/?p=2955"},"modified":"2024-06-11T16:56:08","modified_gmt":"2024-06-11T16:56:08","slug":"opportunity-cost-with-a-twist","status":"publish","type":"post","link":"http:\/\/localhost\/dpetkovski\/opportunity-cost-with-a-twist\/","title":{"rendered":"Opportunity Cost With a Twist"},"content":{"rendered":"

Opportunity Cost is the cost associated with foregone opportunities.<\/p>\n

Most of the time when we make a decision, we pick one of multiple mutually exclusive options.<\/p>\n

Although people usually consider the risks and returns of the chosen\u00a0<\/strong>option, many tend to neglect the potential rewards of the alternatives. And it makes sense, as a person is not necessarily aware of all the opportunities he misses. But they still exist and are often overlooked.<\/p>\n

Understanding the concept of taking things you don\u2019t do\u00a0<\/strong>into account will help you make better (financial) decisions.<\/p>\n

Generally, the cost of a missed opportunity is the difference between the rewards of the best available alternative and the chosen one.<\/p>\n

The tricky part is spotting the best alternative, as it\u2019s inherently invisible to the person that\u2019s missing it.<\/p>\n

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Table of Contents<\/p>\n