The structural choices in our lives are not weighed enough. When we reflect, we think more about the gains and losses of our choices but not the opportunity cost of those choices.
Time, Money, Energy And Attention
When you invest in a project, say for example going to university, well you are allocating a significant amount of time – money – energy and attention. This is a choice not to be taken lightly as it represents a huge opportunity cost, especially since you are at a young age, that is to say at a pivotal period of your life where the decisions you make have huge consequences on your life compared to those you might make 30 years later.
Know What You Want To Achieve
Most of our choices mask hidden or at least often confused intentions. The lack of clarity about our goals leads us astray. Using the example of college, what questions have you asked yourself? What is the ultimate goal you want to achieve by devoting 5 years of your life to studying? Etc.
Clarity Will Help You Know If The Opportunity Cost Is Worth It
Imagine that your goal in going to college is to simply become rich, regardless of your profession, as long as you are legal. Do you think that 5 years of university is the shortest way to get there? Wouldn’t you make better use of your time if you eliminated the “university box” by working on a skill that is necessary to get rich and that can be learned on the job like selling.
Once You Have Discovered Your Intention, You Need To Get Rid Of Your Hidden Intentions To Make The Right Choice
Many of our choices are made out of conformity, out of fear of displeasing. Many people who enroll in university do so because they are afraid of being judged and don’t want to be the black sheep of the family. In the end, it’s because of a lack of courage that we end up making the wrong choices. It takes complete sincerity and honesty to move in the right direction. By choosing to face the truth, we can make the choice that will limit our opportunity cost. It takes time, sometimes a little solitude is necessary, but it is something you will do sooner or later, so it is best to do it as soon as possible to minimize the opportunity cost. Some professions require a university education as they are regulated professions (doctors, lawyers etc.). In other circumstances, the opportunity cost will not be the same since there are countries where higher education is almost free (e.g. France). If you are undecided, it is therefore wise to “waste your time” by acquiring higher value degrees, increasing your employability.
Thinking Rationally Or Intentionally
Evaluating a choice in terms of its opportunity cost is a purely rational approach. It is ideal, as it optimizes your decision-making. However, in many circumstances, you lack clarity about opportunity costs, which means that you cannot fully assess the rationality of your choices. This implies that you can take a more intentional approach, i.e., be clear about the intention you associate with an action, despite the uncertainty of the opportunity cost associated with that choice. If you know what you are going to gain without knowing exactly what you are going to lose, you have at least avoided half the losses, one might say. For example, if you decide to go abroad for a year to improve your language skills, you are in a sense going after that consolation prize (improving your language) without being sure that you could have used that time and money better. On the other hand, by traveling, you will increase serendipity, which may lead to new opportunities that you did not suspect before you left.
What to remember?
– Opportunity cost is an idea to keep in mind when undertaking any project
– It is not always easy to evaluate the opportunity cost
– You never know if you have made the perfect choice, only the optimal choice, since you never know with certainty the impact of your non-actions
