Understanding Opportunity Costs

Imagine you have many opportunities ahead of you. That feels great, especially if you're an options person. Then you have to make a decision about which opportunity you want to pursue. Now it doesn't feel so great. Making a decision means loosing opportunity. It means less options, maybe even no options. It feels worse if you have an intuitive sense that there were more opportunities that you hadn't even considered and those unknown opportunities will also be lost. FOMO! Losing those opportunities is the cost of making a decision - the opportunity cost.

The anxiety eases when you begin to think about the many opportunities that will become available to you after you've made your decision and commit to action. In fact, those future opportunities will be unavailable to you until you make a decision and act on it. Once committed and completed, the new opportunities will be available for you to discover.

And so it goes. Step by step, decision by decision, choice by choice. Seems straightforward. Where the tangle starts is finding an efficient strategy for identifying opportunities and quickly sorting for those that are high value.

Imagine at the beginning of the day you have $20 in your hand. There's a lot you can do with 20 bucks, if you think about it. Go to a movie, enjoy a take-out lunch, have coffee with friends, give it to charity, invest it, and plenty more options. In fact, it's probable you couldn't think of all the possibilities, just most of them. Before feeling pressured to make a decision, the world looks like this: