Opportunity Cost

Understand the power of opportunity cost to make educated decisions on your time!

3
 min read

Opportunity cost is another thing all wealthy people understand down to the core. They use opportunity cost to best allocate their time and investments.

EXAMPLE: Your full time 9-5 job brings in $1000/40 hours a week. Your side hustle brings in $1000/10 hours a week. If you're making the same amount of money only working 1/4 of the time, why not leverage a full 40-50 hour week on the activity that brings in more money? Quit your 9-5 and turn your side hustle into a full time job!

EXAMPLE: You want to purchase a brand new MERCEDES G-WAGON for $199,000. The monthly payment is $3,600 for a 60-month term loan and you have $25k as a down payment. If every 4 years you buy a car with similar payments, your vehicles are costing you $44,000,000 throughout your life. Yes, you’ve made a $44 million dollar mistake. 😲

Compounding interest chart

If you instead invested your hypothetical $25K down payment, you would be worth over $44 million by the time you're 70 years old. That's why people like Warren Buffett drive clunkers. He knows opportunity cost!

"But, PAT, I really want a nice car to reward myself for all my hard work!" you say. Trust me, I get it! I absolutely love cars too. Have you considered a lease option?

Don’t let the shiny objects distract you. Little mistakes like new cars can cost you millions over the course of your lifetime. Learn to adopt a wealth mindset. Money is a numbers game and the wealthiest people know how to do the math. 

With Opportunity Cost training, you will learn to produce income leveraging OPM, lower your taxes by transferring earned income directly into stocks or real estate, and how to make the math work for YOU through compound interest.