By far, my biggest lesson in 2012 is learning about opportunity cost, not in the way I had learnt it in business books, I was living it.
The revelation happened earlier on this year when a trusted friend asked me about the outcome of a decision I had made. I tried to be wise about my answer and blurted the whole “there is no black or white” cliche. But in fact I was thinking that my decision had lead me to a few peaks and a lot more troughs! So the question is how many troughs am I willing to sacrifice for a few peaks?
Enough rhetoric. The point is, I learned that everything has a cost, and I was the gatekeeper. It sounds easy but try to think about a decision that you made in your life and think about its cost. I suppose it’s the best way to evaluate any decision… Does the outcome cover its cost?
There are a few factors to consider when calculating opportunity costs…
First and most importantly “Time”. If you haven’t already, you will eventually come to the realization that time is so precious and that spending time doing specific tasks, hanging out with specific people has a big cost. The “time value” of time! Time is expensive and a big element of the cost! So you ought to spend it wisely.
Second is “You”. You must have struggled with an element of your past, some of us are more fortunate than others and come with less baggage. Sometimes, you go through a tough “unlearning” process to finally figure out who you are, sometimes, that realization never happens! Eventually you learn that the most important person to please in the entire world is non other than yourself! If you are happy, you can make everyone else around you happy! So when you make a decision and you are considering its cost, always put yourself ahead. Think about it in the same way as those creepy plane videos when the oxygen masks drop. You are instructed to put your oxygen mask on first, then help the people around you. Simple.
Third is “Your environment”. Every decision has a wider implication on your environment. Weigh these implications carefully and make sure you are “OK” with them. Don’t proceed if you’re not able to handle the situation. Decisions require guts. If you make the call, don’t look back, keep going. But always remember everything comes at a cost.
So the trick really is to value your time, yourself and the impact of your decisions before you make them in order not to be on the loosing end of the opportunity costs. But no matter what you do, whether it turns out that the decision you had made was right or wrong, keep moving and forgive yourself!
So next time you make a decision, always ask yourself, at what cost?