Opportunity Cost [zz]

URL: http://edu.sina.com.cn/l/2002-07-28/29034.html
Accumulating capital and cultivating ability is like a ladder to jump to the swimming pool. In physics, an object is at a height to generate potential energy. Your position means that gravity will cause motion when you jump down. However, the premise for transforming potential energy into motion is to jump down-you must take this step. Value creation is like this. Only when you try will you know what value you can create.

The concept of "Opportunity Cost" in economics helps us to understand the benefits of jumping from high to low. If you do not, the price you pay is the value that does not put the potential into practice. If you know that you can create value now, but you don't do it, the price you pay is to lose a chance. You may not know the value of not doing something, but those who know how to create value will be very clear. In business, if an executive director was able to develop a company, but was afraid of risks, he would not dare to lend to the bank to promote growth; or he did not effectively organize his work due to arrogance, the failure to maximize the potential of the company, despite making profits, still infringes on the interests of shareholders. The board of directors will dismiss such a chief executive and replace them with more ambitious candidates.

In the first phase of your active life, it is difficult for you to accurately measure the opportunity costs of your abandoned things. For Li Wei, the company boss can see clearly that she spent too many years studying hard and not creating value. She keeps accumulating the human capital required for her work, but year after year, the opportunity cost for her stay at school also increases. When she accumulates enough capital, she has been listed as "not hired" in the first stage of her life.

I am not telling you that you should work as early as possible in all circumstances. As we mentioned above, Nicolas o Gom is the right decision to start a company. But Jeff spent a year or two looking for a position that suits him, and ultimately identifying art as his path of development. Therefore, each person is a different individual, and the opportunity cost varies from person to person.

If you suspect that you are wasting time, I suggest you combine human capital investment and value creation to strike a balance. Or early or late, there will always be a time in your life. You need to change from human capital creation to value creation and jump down from the high stage.

Never escape value creation and be a "Forever student ". Take a proactive attitude towards your life and put your ideas into practice. If you make a mistake, you can find the cause of failure. The risk at the first stage of life is minimal. In economics, the opportunity cost for "preparing for war" is much higher than the price you pay for mistakes.