I’ve seen a lot of talk in the blogosphere and elsewhere lately about following your dreams. Most is good solid advice about doing what you love or working in a field that you love. I have to ask myself, what would happen if everyone did this? There would be very few people working at restaurants, in construction, or really in a vast majority of the jobs out there. So why doesn’t everyone follow their dreams? I have a couple of theories. Lack of ambition and drive. Lack of dream job availability. Or, the one that applies to me, opportunity cost.
Every choice in this world has an opportunity cost. Dictionary.com defines opportunity cost as “The cost of an alternative that must be forgone in order to pursue a certain action.” This applies from the small dreams and goals like my dream of owning a Wii. Sure, they aren’t really that expensive, but what alternatives would be given up for that $300 spent on a gaming console? For $300 my wife, daughter, and I could go to the movies 10 times. We could spend a couple of nights in a hotel at the beach. I could buy something cool for my Jeep. I could upgrade my kayak. I can think of a lot of other uses for $300. Since I don’t have an unlimited supply of 300 dollar bills, the opportunity cost of purchasing a Wii is the other things I would miss out on.
I usually try to perform a little check in my head anytime I make a purchase that is a want rather than a need. I think of the other things that could be done with my money, and if I still want the item, then I proceed with the purchase. This is a particularly useful method when I get the itch for something new and expensive. Something like a $2000 TV or a $1000 winch for the Jeep. I usually do the mental check of opportunity costs and typically talk myself out of the impulse buys.
Of course the bigger the dream, the bigger the opportunity cost. I have a dream to travel the country in an RV. I could quit my job and sell my house and everything I own, and make this dream happen today. But that is too high an opportunity cost for me. I’m not willing to give up a good paying job and my house in order to follow this dream. In some cases, I must decide which dreams are best fulfilled now, and which should be put off for later or possibly forgone altogether.
I also have a dream to write. As you can see, I’m doing this already, but even this simple blog has opportunity cost. I have to give up some video game time to spend some time writing.
What should we do when all the opportunity costs seem so high? Possibly we are right where we should be. But, if we are not, then we compromise. Instead of buying the Wii this year, I bought Buzz Quiz World for my PlayStation, so I have a game to share with family and friends on a game system that I already own. I’ll save the 300 bucks until I decide how to best spend it. For my dream of traveling the country, I’ll instead take short vacations. I’ll also plan for RV travel to be a future possibility. As for writing, it’s worth the small amount of gaming time I give up. I get to release some creativity, share some wisdom, and make friends with my readers and commenters.
What are the opportunity costs to your dreams?
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{ 7 comments… read them below or add one }
I relay like that you are talking about the opportunity coast of the choice we make. When we decide to set goals and change our lives we have to give somethings up in order to get what we want. This can be economic or temporal sacrifice as you mention but it can also be emotional. We always need to be be considering if what we are getting worth what we give up.
Quinn´s last blog ..Do what you want with wisdom
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Eric Watermolen
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December 31st, 2009 at 6:23 pm
Thanks Quinn. I felt the need to discuss opportunity cost, as it often gets overlooked during the excitement of dream building and goal setting.
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Hi Eric,
Great post and very useful in reminding us that there is an opportunity cost every time we spend money. In the past six months I’ve also come to this conclusion that if it’s not a need then I will give myself a chance to talk myslef out of a purchase.
Cheers.
Gordie´s last blog ..Look, Mom! My Blog’s Sprouting Pubes!
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Eric Watermolen
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December 31st, 2009 at 7:17 pm
Great conclusion Gordie. I like to do that too, give myself a chance to talk my way out of a purchase. I find I spend a lot less that way.
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I don’t think very few people would work in construction and restaurants, it’s just that the whole industry would change. For restaurants, perhaps it would go from the standard franchise thing we see today to privately owned passion restaurant with 5-10 tables where someone is sharing their love for food.
I think we should stop worrying about what would happen if everyone did what they loved and just do it. I have a feeling that it will all work out, and if not it will be a fun ride.
I have set-up my life so I have very little opportunity costs to follow my passion. I make my living online which enables me to write a blog on a topic that I love and move to a country that rocks. It’s all about moving towards what you want to do, at least for me.
Henri @ Wake Up Cloud´s last blog ..Law of Attraction for Conscious People – The Series
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Eric Watermolen
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December 31st, 2009 at 7:21 pm
I love it Henri, good stuff! It would be a fun ride even if it didn’t all work out. I like the idea of companies run by people that are passionate, those restaurants are always so much better.
From what I’ve read on your blog I can see your low opportunity costs. I’m excited about your upcoming trip to Spain, and will be following your adventure.
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Henri @ Wake Up Cloud
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December 31st, 2009 at 8:09 pm
Awesome! I agree that the passionate places are always much more fun. The customer service is excellent.
My move to Spain will be interesting indeed. Let’s crush 2010!
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Hey Eric.. Yep there definately is a cost involved in pursuing anything we desire. Some things are more costly than others and that can put us off, I know there have been things I have put to one side at times, where there are others which I have pursued hard
I find for myself, it’s not so much the thought of the cost as there are always ways to get what your after, i.e sell something to buy something etc.
I find for me it’s the things we desire that we aren’t too sure if we want to commit to spending the time to attain. Maybe its because were not sure if when we get it, it’s really what we wanted.
Anyway.. great post bud.. I love reading your blog
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Eric Watermolen
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December 31st, 2009 at 7:29 pm
Jon, thanks for the compliments. I consider time to be the most precious commodity, and that is one of the greatest costs in most any endeavor.
I’ve had things go both ways, sometimes I’ve put a lot of time into something and feel that some of it was wasted when it didn’t all work out, and other times I’ve been most pleased with spending time working towards a goal. This reminds me of another economics term; buyers remorse. I suppose that could be applied to time as well… dreamers remorse. Only difference is dreamers remorse is likely to come from lack of action and the lack of following goals. Oh well, I feel like I’m rambling now, looks like you got me rolling.
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Hi Eric – I tend to think of this not in terms of cost but rather meaning and values. In other words, I forgo something that has less value to me (like new cars) so I get things that are more valuable (like travel). In the end I’m more satisfied and my life is more meaningful.
But about following dreams, I’m not so sure. I’ve seen so many dreams deferred in my line of work, and usually the reason is exactly what you say – it appears to cost too much. The underlying value is often security…”if I follow my dreams I won’t have enough of it.” But security is such a loaded value, often not our own but stemming from culture, family, society, shoulds.
Yet on the other hand, I think it’s important to scratch beneath the surface of a dream to find what drives it, what is the true yearning, the real underlying values. Sometimes enacting the dream is our ego’s way to concretize things, because that’s what it does best. But in so doing we may miss the dream’s deeper meaning.
Thanks for the thoughtful post!
Patty @ Why Not Start Now?´s last blog ..Before the New Year
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Eric Watermolen
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December 31st, 2009 at 7:41 pm
Patty, I agree completely. Cost is often personal value rather than monetary cost. Security is one of the underlying values for many, and is for me as well. It is such a loaded value, but so so hard to overcome. I have also found the need for security to reach higher importance with a family. Flying solo makes it easier to take risks. It becomes harder when others depend on you.
PS. Great choice of words, “concretize” is a great word.
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I think you have to base it on what you most regret. For example, when you’re old and infirm will you be wishing you’d played more Wii or traveled the country? Or will you be glad you burned the candle at both ends and did it all?
Happy new year Mr. Mysterious:)
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Eric Watermolen
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December 31st, 2009 at 7:45 pm
Ha! Happy new year to you. That’s a good way to look at it. Jet into the future and look back to see which paths would have been the best to take. You have done what others just dream about, so I highly value your opinions on this topic. I envy the adventure you undertook and hope when the time is right I can do the same.
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This is something that I’ve always noticed, but didn’t realize until recently that there was a name for it. We are each only one and there is only so much that can be done at one time, unless you are Oprah or Warren Buffet, with our incomes. So, choices have to be made in order of importance and we all have to make these choices.
Patrenia´s last blog ..The Day We Turned Our Financial Lives Around…
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Eric Watermolen
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January 1st, 2010 at 11:16 am
Yep, somehow I stayed awake long enough in my economics classes to remember some of the terminology. I tend to think that even the ultra rich have opportunity costs. Most of those folks work their butts off, when they could be out enjoying their loads of dough.
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