From previous posts, i mentioned that i majored in economics at the university and have been learning economics since senior high school. Two of the many theories in economics that really struck a chord with me is the concept of choice and opportunity cost. People with no basic knowledge of economics will wonder what these two theories are about. I will therefore try and explain these concepts in a best way possible.
Opportunity cost is basically what you have to give up to acquire something. There are several ways we can use our resources be it money, energy, time etc but these resources are limited that is why we are forced to make a choice. Opportunity cost can therefore be seen as the best immediate alternative you could have spent you resources on had you not spent it on something else. Therefore the things you decide to spend your limited resources on is your 'choice'. From face value, this concept does not seem extraordinary or eye opening but i've personally come to respect this theory as i grow up and begin to make choices. Because economics theories tell me that for every little thing i've spent money, energy and time on, there are other important alternatives i could have used those resources on. In this blog post i have separated my 'resources into three key areas that is time, money and energy. Time because as humans, we have fashioned our lives according to a certain O'clock by which we function. There is time to go to bed, time to rise, time to go to work/school, time to come back home and so on. Majority of us are paid by the number of hours and days we are willing to work. Hence the higher the number of hours we are willing to work, the higher the wages we expect. Time is such a valuable resource whose importance can never be underestimated. How many times have you heard a couple or people in a relationship having an argument and one of them say "you don't spend time with me like you used to" or "we don't spend time together any more". In this sentence we have seen the word "time" associated with "spend". Which means the fact that you can "spend time" shows it's a limited resource. How i spend my time is beginning to matter to me these past few weeks because once in a while the question of how i'm spending my time pops up in my head and i sincerely hope i'm spending my time the right way.
I classify money as another important part of my resources because it's almost impossible to live without money. The basic things you need to exist on earth have to be bought with money. It is therefore little wonder money is tightly associated with time. "Time is money" its often said. We wake up everyday trading our time for money because we have to survive and after we have paid for our survival, we also want nicer cars, phones, clothes not forgetting the occasional holiday. I personally love entrepreneurs and startup founders and i always wish there were more entrepreneurs. But i ask a lot of young people why they haven't turned their great ideas and skills into business and the response i usually get is. "I don't have the capital (money) to start" or "i am barely getting by" therefore it looks like money as a resource can act as a stumbling block between someone who has a great business idea and actually starting a business and enjoying success.
My third and final resource i consider vital is energy. The energy to wake up everyday and get something done be it writing a blog post, speaking to startup founders and entrepreneurs and how best i can help them, connecting with my family and friends and even the energy to resist junk food. How i spend my energy is now a prime concern to me because there is an opportunity cost and a best alternative to whatever i'm spending my energy on at the moment. For example, the time and energy i spend wondering whether a blog post would be successful could be used to do further writing and research to make the blog post and the blog even better.
If my opportunity costs are the best alternate ways i can use my resources (time, money and energy). Then it is imperative that whatever these resources go into must offer me the best in value and returns. But the question is how do i know that i'm spending my resources on things that have value? And the simple answer i use to determine that is "regret". Do i regret how i spent the day when i'm retiring to bed at night? Or how i spent money on things i didn't really need. If i continuously regret how i'm spending my resources then it means something has to change.
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