169-If You Understand and Apply Opportunity Cost to Every Decision, You'll Coach Yourself To Your Ideal Life
Radical Personal Finance
Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP
4.2 • 1.9K Ratings
🗓️ 18 March 2015
⏱️ 57 minutes
🧾️ Download transcript
Summary
On Monday, I released the show on new cars vs used cars. It became clear to me while doing that show that I really needed to do an in-depth discussion of the concept of Opportunity Cost.
If you understand Opportunity Cost you can easily help people to make better decisions.
All of us make decisions based on what we value. Every transaction is based on each party involved preferring what the other has more than what he/she has.
Good decision making is largely based on simply understanding all of the options that each of us has, considering the various scenarios, and then choosing which scenario is most ideal for our circumstances.
In today's show I add some serious meat to this idea with a bunch of pertinent examples:
- Car-buying options
- College options
- Housing options
- Eating and moving options
- Options on where we live
- Family options
- And more!
At the end of the day, you control your own life. Consider your decisions carefully and simply make the decision that is best for you.
Joshua
Links:
- Support the show on Patreon: http://radicalpersonalfinance.com/patron
- Russ Robert's article on Opportunity Cost: http://www.econlib.org/library/Columns/y2007/Robertsopportunitycost.html
- 100 Countries or an SUV: http://chrisguillebeau.com/100-countries-or-an-suv/
Transcript
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| 0:00.0 | Do you appreciate straightforward objective information? |
| 0:05.0 | Would you like to keep radical personal finance in that category? |
| 0:10.0 | If so, please go to Radical Personal Finance.com |
| 0:13.4 | slash patron to see how you can support the show and to see your |
| 0:18.1 | rewards for doing so. |
| 0:20.3 | Today I want to share with you a concept that I believe has the potential to |
| 0:26.4 | transform your life in and of itself and I don't say those words lightly. |
| 0:32.0 | We're going to talk about the concept of |
| 0:34.7 | opportunity cost and give me a shot give me a chance to flesh out this concept for |
| 0:40.4 | you and then let me know if you agree. I really believe this is one of the for you |
| 0:43.0 | I really believe this is one of the most powerful ideas that you can understand |
| 0:47.5 | when it comes to personal financial planning. And the Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets. Today we take |
| 1:11.4 | into a little bit of economics, but we're going to apply it very directly to personal |
| 1:16.5 | financial planning. |
| 1:17.5 | I mentioned this briefly on Monday show, the Used Car v New Cars show that I was going to do this. |
| 1:23.0 | I didn't plan to do it, but I just considered it and I thought this is too important for me to let it go any longer. |
| 1:29.0 | So today, we go into opportunity cost. Monday's show was a detailed discussion of used cars versus new cars. |
| 1:35.0 | And I had been |
| 1:40.0 | a detailed discussion of used cars versus new cars |
| 1:42.0 | and I had been excited to do the show but frankly I |
| 1:45.5 | just felt like it fell a little bit flat and I did my best I wasn't feeling great at |
| 1:49.6 | the time and I just think my brain was a little bit foggy. I did my best with it. |
... |
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