Category: Finance

Opportunity cost

If you’re saying “yes” to one thing (and this applies to anything in life), that means you are saying “no” to something else.

What is your opportunity cost? We can’t be in two places at once. We only have so much time in the day. We have limited resources. So by saying yes to one thing, it is costing you the opportunity to do something else.

Choose what you spend your time, energy, and money on wisely. If you always want to do what feels good in the moment, you may be sacrificing the well-being of your future self.

“On sale”

You know that clearance rack, or the item that is on sale?

You can walk past it without buying anything…

Before you put whatever item is on sale into your shopping cart (whether that’s online or in person), ask yourself if this is something you actually need or if you just like a “bargain.”

One could argue that it’s not a bargain at all if you end up spending money on something you didn’t intend to…

Delayed gratification

Your first home purchase will not be your dream house. But buying that first home will put you on the path to eventually get your dream house.

We live in a state of instant gratification, where we stretch to the absolute limit to buy what we can “afford.” But if you are smart with your money, and take baby steps along the way, that will enable you to afford your dream home down the road instead of being house poor right now.

The longer you can delay “gratification,” the better off you’ll be.

Taking asymmetric risks

What has a very low cost, but could have a major reward (or save you from disaster)? This should be thought of in terms of any of your resources (most importantly, your time, money, and energy).

For example, buckling your seatbelt takes two seconds, but it can save your life (or save you from an expensive ticket). The reward (living and/or saving money) seems to be well worth the cost (a few seconds).

Where can you find these asymmetric risks in life? Whenever you find them, make sure you take advantage of it.

Why reading 5 pages per day will change your life

5 pages per day x 365 days per year = 1,825 pages per year.

If a book averages 300 pages (which seems high), you would finish 6+ books per year.

What you read daily changes the way you think. If you can change your thoughts, you can change your life.

We all need constant, little reminders of how we should be acting. By going too long without thinking about something (leadership, business, marketing, sales, relationships, finance, etc), we often forget what we should be applying in everyday circumstances.