Coaching Tip: Connect the Opportunity Cost to Your Legacy
Let's assume that everything in life costs SOMETHING – considering there are no free lunches. Thus, some things cost money, some cost time, some cost energy, some cost pain -- and some, a combination of all of these different types of costs.So, what is opportunity cost?
Opportunity cost is the price you pay when/because you're working on one goal/result. You "lose" then, whatever you might have gained from working on an entirely different goal/result – thus you're giving up the opportunity of benefiting from this goal because you're working on other goals.
For example, the opportunity cost of taking a $50,000 job right out of high school (which, by the way sounds pretty good, until you compare it against what you'll "lose" by taking it). By taking this job and not getting your degree, historically there's a good chance that you'll never qualify to get a job paying, let's say, $250,000 within 10 years. So the opportunity cost is all that money you COULD have made if you'd had the wisdom to pass on that $50K a year job and stuck it out for your degree.
Opportunity cost works in every situation. For example, if you read the Wall Street Journal every morning, there's plenty of benefit from that, but it may mean that you won't hear about something REALLY critical to your current or future success from another source because you were too busy reading the WSJ. So, you could say that reading the WSJ was incredibly expensive – the opportunity cost is high, given what you missed out on.The interesting thing about opportunity cost is that few of us would deliberately incur high ones, yet, in most cases, we just don't know HOW HIGH they REALLY are, because we never knew what we'd missed out on.
Opportunity cost is a KEY factor today, both in the business and personal arena because we have FAR more choices today than ever before in history. Few of us have been taught how to choose well, which would help lower our opportunity costs. Knowing that the choices we each have available in life is like having a proverbial buffet to select from and understanding what values you want to express for an enduring legacy become all important to daily living.
The question to ask your self right now is:
What is my opportunity cost for the lifestyle that I am living today? In other words, how 'expensive' is your lifestyle?
When faced with having to choose a project or course to follow, ask: What is the cost of choosing to do this next? How does it meet the pictures I have for my legacy?
HINT: It is based on your values, not someone else’s.
Can YOU relate to this? If so, feel free to add your comments below. It may help someone else, ya know!