Waiting in my inbox this morning was a typical sales-pitch-laden message from the virtual coaching app I use. The app, and its use, are free, but you can opt in for paid coaching with a real person. The theme for today was something about working on the most important task at hand. Normally, I don’t even skim these emails, but this one had some numbers and dollar signs in the first paragraph, and I’m a numbers nerd, so I skimmed over it, and was shocked to learn that a solo entrepreneur who spends his or her time working on the wrong business task is, in effect, wasting $1,000 per day.
In the business world, this is known as opportunity cost: everything you do not only has an actual cost associated with it, but there is also a cost associated with not doing the other things you could be doing instead. For example, if I choose to do my own bookkeeping and accounting, I’m probably saving myself a couple thousand dollars a year by not paying someone else to do it. But I am also using that time to do tasks that don’t generate income (in my case writing paid freelance articles), so there is an opportunity cost for bookkeeping and accounting, too. It only makes sense for me to continue doing those tasks for myself if I save more money doing them then I could earn by using that time to write.
As a self-employed fitness professional and writer, I’m very interested in the business application of opportunity cost. But what really makes me squirm is thinking about the opportunity cost inherent in the rest of my life. Apart from money, there are other limited resources that we can measure against one another, at least subjectively. Time, energy, willpower, calories – if you think about it long enough, you can start to measure almost everything. If I’m going to eat 2,000 calories a day, should I spend two thirds of them on a burrito from Chipotle? What do I give up when I do that?
Thinking in this way is essentially the basis of a Well Curated Life: we are presented with many choices every day, and when we make a choice, we aren’t simply choosing one thing, we are rejecting many other possible alternatives. When I spend two hours watching a movie in the evening, I forego the opportunity to read a good book or go listen to a local band. When I choose to train for a marathon, my exercise focus shifts almost entirely to running, leaving strength and flexibility training in the corner. When I open my internet browser and navigate to Facebook, I give up the opportunity to do something productive or enlightening with my time.
Of course, we can’t always be entirely logical and rational; there is a significant and heavy emotional component to every calculation of opportunity cost, even those that involve only hours and minutes or dollars and cents. But by thinking about the other side of our choices – those things that we give up – hopefully we will make decisions that are truly in alignment with the way we want to live life.