1 00:00:03,440 --> 00:00:06,720 Speaker 1: Welcome to Before Breakfast, a production of I Heart Radio. 2 00:00:09,640 --> 00:00:14,200 Speaker 1: Good Morning, This is Laura. Welcome to the Before Breakfast podcast. 3 00:00:14,760 --> 00:00:19,120 Speaker 1: Today's tip is to consider the opportunity cost when you're 4 00:00:19,200 --> 00:00:22,480 Speaker 1: deciding whether to take on a new responsibility or accept 5 00:00:22,480 --> 00:00:28,480 Speaker 1: an invitation. Don't evaluate this option in isolation. Instead, consider 6 00:00:28,480 --> 00:00:31,840 Speaker 1: how the option compares to the next best opportunity that 7 00:00:31,960 --> 00:00:35,320 Speaker 1: you have to give up to say yes. In a 8 00:00:35,360 --> 00:00:38,640 Speaker 1: recent episode of the NPR show and podcast Planet Money, 9 00:00:38,960 --> 00:00:42,760 Speaker 1: economists were asked about the most useful ideas from economics. 10 00:00:43,479 --> 00:00:47,680 Speaker 1: Michigan State economist Lisa Cook named opportunity cost, and she's 11 00:00:47,680 --> 00:00:50,760 Speaker 1: got my vote on this one. As you may remember 12 00:00:50,760 --> 00:00:53,960 Speaker 1: from your econ one oh one days, opportunity cost is 13 00:00:54,000 --> 00:00:56,800 Speaker 1: the principle that the true cost of something is what 14 00:00:56,920 --> 00:00:59,120 Speaker 1: you have to give up in order to get it. 15 00:00:59,840 --> 00:01:04,640 Speaker 1: In other words, that new car you're considering doesn't just costs, 16 00:01:05,280 --> 00:01:08,400 Speaker 1: it's opportunity cost. Might be the kitchen renovation that you 17 00:01:08,600 --> 00:01:11,280 Speaker 1: don't have thirty dollars for if you buy the car, 18 00:01:12,040 --> 00:01:14,319 Speaker 1: or maybe you're in a job where in normal times 19 00:01:14,440 --> 00:01:17,679 Speaker 1: you can pick up extra shifts. The opportunity cost of 20 00:01:17,680 --> 00:01:20,400 Speaker 1: the car might be the extra day every other week 21 00:01:20,440 --> 00:01:22,520 Speaker 1: you'll need to work until the car is paid off. 22 00:01:23,520 --> 00:01:26,880 Speaker 1: Or you could invest the thirty dollars and in twenty years, 23 00:01:26,920 --> 00:01:31,120 Speaker 1: with compound interest, have enough saved to retire a year earlier. 24 00:01:31,880 --> 00:01:35,960 Speaker 1: You get the idea. As is often the case, money 25 00:01:36,000 --> 00:01:39,440 Speaker 1: and time turn out to be similar, our choices about 26 00:01:39,480 --> 00:01:43,440 Speaker 1: time turn out to have an opportunity cost too. When 27 00:01:43,480 --> 00:01:46,319 Speaker 1: you choose to do one thing, you are choosing not 28 00:01:46,440 --> 00:01:51,040 Speaker 1: to do something else, such as life. There are no freebies, 29 00:01:51,560 --> 00:01:53,920 Speaker 1: but you want to make sure that your choice is 30 00:01:53,960 --> 00:01:58,840 Speaker 1: both conscious and wise. The key realization here is that 31 00:01:58,880 --> 00:02:01,560 Speaker 1: when you choose to fill your time with something, the 32 00:02:01,600 --> 00:02:06,760 Speaker 1: alternative is not nothing. It's doing whatever else you could 33 00:02:06,760 --> 00:02:09,840 Speaker 1: have done in the same amount of time. So if 34 00:02:09,840 --> 00:02:12,959 Speaker 1: it takes you three hours to make the elaborate dessert 35 00:02:13,000 --> 00:02:16,600 Speaker 1: you saw on Pinterest, the opportunity cost might be reading 36 00:02:16,639 --> 00:02:18,840 Speaker 1: most of that new novel that you keep meaning to 37 00:02:18,880 --> 00:02:23,080 Speaker 1: pick up. Both could occupy the same block of leisure time, 38 00:02:24,040 --> 00:02:26,440 Speaker 1: or maybe your team has set up a recurring meeting 39 00:02:26,560 --> 00:02:30,760 Speaker 1: at nine am on Tuesdays. The opportunity cost might be 40 00:02:30,840 --> 00:02:33,040 Speaker 1: the other work people could have done at that time, 41 00:02:33,639 --> 00:02:37,000 Speaker 1: such as powering through big projects without interruption. When people's 42 00:02:37,000 --> 00:02:41,480 Speaker 1: minds tend to be fresh or in normal times meeting 43 00:02:41,480 --> 00:02:45,760 Speaker 1: clients for breakfast. So is the dessert or the recurring 44 00:02:45,800 --> 00:02:49,840 Speaker 1: meeting worth it. It's entirely possible that the answer is yes. 45 00:02:50,360 --> 00:02:52,959 Speaker 1: But the issue is that people often decide to take 46 00:02:52,960 --> 00:02:56,560 Speaker 1: on activities based on whether they're free, not whether these 47 00:02:56,600 --> 00:03:00,400 Speaker 1: activities are the best use of time. When someone asks 48 00:03:00,440 --> 00:03:03,200 Speaker 1: to meet on Tuesday at nine am, you look at 49 00:03:03,200 --> 00:03:07,680 Speaker 1: your calendar, see that it's open, and say yes. You 50 00:03:07,720 --> 00:03:12,400 Speaker 1: don't consider that maybe come Tuesday your biggest client will 51 00:03:12,400 --> 00:03:15,720 Speaker 1: be asking for a proposal by noon, or that at 52 00:03:15,240 --> 00:03:19,640 Speaker 1: am on Tuesday, your cousin will want to FaceTime because 53 00:03:19,639 --> 00:03:22,640 Speaker 1: after a month of quarantining with his significant other, they've 54 00:03:22,680 --> 00:03:25,720 Speaker 1: decided to get engaged and want to share the celebratory 55 00:03:25,760 --> 00:03:28,639 Speaker 1: news with you. Now, of course, neither of these new 56 00:03:28,639 --> 00:03:32,880 Speaker 1: developments may be likely, but you don't know that. When 57 00:03:32,880 --> 00:03:35,760 Speaker 1: we take on commitments or lukewarm about we may have 58 00:03:35,840 --> 00:03:38,640 Speaker 1: to turn down things we really want to do, or 59 00:03:38,720 --> 00:03:42,280 Speaker 1: throw our whole schedules into flux and create bad feelings 60 00:03:42,640 --> 00:03:45,640 Speaker 1: in order to make the good stuff happen. Better to 61 00:03:45,680 --> 00:03:49,120 Speaker 1: be more strategic when you say yes to something that's 62 00:03:49,160 --> 00:03:52,240 Speaker 1: only a five or a six on a ten point scale, 63 00:03:52,880 --> 00:03:56,960 Speaker 1: you crowd out space for the eights and nine. That's 64 00:03:57,000 --> 00:04:01,600 Speaker 1: the real opportunity cost. Don't assume your time will only 65 00:04:01,600 --> 00:04:06,240 Speaker 1: be filled with a zero. So today, as you're considering 66 00:04:06,280 --> 00:04:09,920 Speaker 1: taking things on, ask yourself what else you could do 67 00:04:10,200 --> 00:04:14,200 Speaker 1: with an equivalent quantity of time. Consider how you'd feel 68 00:04:14,360 --> 00:04:16,960 Speaker 1: if an opportunity to take on something that was an 69 00:04:17,000 --> 00:04:21,200 Speaker 1: eight or a nine wafted into your life, And consider 70 00:04:21,240 --> 00:04:25,320 Speaker 1: that you can often create opportunities for eights and nine 71 00:04:25,600 --> 00:04:29,680 Speaker 1: if you're smart and keep your eyes open. Hopefully this 72 00:04:29,760 --> 00:04:33,560 Speaker 1: will empower you to turn down the mediocre with more confidence. 73 00:04:34,560 --> 00:04:38,520 Speaker 1: In the meantime, this is Laura. Thanks for listening, and 74 00:04:38,600 --> 00:04:47,640 Speaker 1: here's to making the most of our time. Hey everybody, 75 00:04:47,839 --> 00:04:49,960 Speaker 1: I'd love to hear from you. You can send me 76 00:04:50,000 --> 00:04:53,640 Speaker 1: your tips, your questions, or anything else. Just connect with 77 00:04:53,680 --> 00:04:58,080 Speaker 1: me on Twitter, Facebook and Instagram at Before Breakfast pod 78 00:04:58,760 --> 00:05:03,120 Speaker 1: that's B the number four then breakfast p o D. 79 00:05:03,960 --> 00:05:06,800 Speaker 1: You can also shoot me an email at Before Breakfast 80 00:05:06,880 --> 00:05:10,279 Speaker 1: podcast at i heeart media dot com that Before Breakfast 81 00:05:10,400 --> 00:05:12,960 Speaker 1: is spelled out with all the letters. Thanks so much. 82 00:05:12,960 --> 00:05:21,159 Speaker 1: Should I look forward to staying in touch. Before Breakfast 83 00:05:21,240 --> 00:05:24,360 Speaker 1: is a production of i heart Radio. 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