Q: “What thing about humanity surprises you the most?” A: Man. Because he sacrifices his health in order to make money. Then he sacrifices his money to recuperate his health.Then he is so anxious about the future that he does not enjoy the present, and as a result he does not live in the present or the future. He lives as if he’s never going to die, and then he dies having never really lived.” - Dalai Lama
I first learned about opportunity cost a couple of years ago, in my Economics class, discussing about sustainable resource management, and putting a value to conservation efforts as opposed to development plans.
In making a choice, we are foregoing or sacrificing the cost (or value) of the second best alternative. The cost can be monetary, or non-monetary, like time, pleasure or other benefits which contributes to the overall utility (or happiness) of the foregone choice. In other words, trade-offs.
When I look at how much I’ve spent in 2011 for books, I realised I could have saved the money, and fund my first smartphone (a purchase I’ve deferred to more than a year already) with it. But when I dig deeper, books matter to me in more ways than a smartphone could, books gave me more happiness (or utility) way beyond what I can imagine a smartphone could provide me.
(On a side note, I still have a lustful desire for a smartphone. Happiness, desire, needs stand at a different angular facets of our life, I am beginning to learn).
I felt like a lightning struck inside my head, a moment of clarity I rarely encounter; I have made a trade-off.
The experience kick-started a series of reflection over the week, as I go through my day at home and at work. I am noticing trade-offs, big or small, in my life.
Running, so I can sleep better. Working late, at the expense of my own self development/social life. Eating out, so I get my share of vegetables (I only eat bread, egg, instant noodle, or canned soup at home). Paying more for rent, because I like my privacy.
Some trade-offs are bigger, more complex and intertwined. Like choosing to work at my current workplace, because they give deserving pay (I am able to spend willingly on myself, and on others, and I am able to plan for the future), because I enjoy the dynamic, the pressure, and the challenges it demands of myself (I am experiencing steep learning curve everyday, dealing with C-level executives and executing my tasks with confidence), and because it has an expiry date (the project I’m working on ends in 2013 – it gives me the leeway to plan for other things, in the future - gallivanting in Europe for example).
I am doing so at the expense of something else, of course, a long term secured job, saving for bigger things like a new car or a house (or even the chance to settle down and start a family). Are they the cost I’m willing to pay at the expense of my own independence, flexibility, and freedom? I would have liked to answer yes, but honestly, I don’t know.
How do you know if you are trading off the wrong things?
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