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Showing posts with the label alternative costs

Just my thoughts #0337

All matter in this world, including the human body, is composed of quantum particles. Even if we shake hands, we might think that our elements mix, but they do not. This is because the physical properties of quantum—the special forces generated in the quantum realm—remain unchanged. To endure difficult circumstances means maintaining your state with strength. If you have stood firm so far, it indicates you possess the power. Holding up is a form of ability. - Joseph’s “just my thoughts”

Just my thoughts #0070

In business, capital means business funds. A successful entrepreneur often says, "I started my business without any capital". It's partly true, but it's a lie. The entrepreneur just said that capital means only cash. However, all kinds of businesses need to be fundamentally business funds in any even not cash. The entrepreneur didn't count the founder's labor cost. No inputs, no outcomes. The uncounted labor costs are called "alternative costs" or "opportunity costs". This comes from comparative advantage. If the entrepreneur doesn't accept the uncounted labor cost as a debt, the entrepreneur is equivalent to losing the profit due to opportunity costs. Please always remember this. There is no free lunch in this world. - Joseph’s “just my thoughts”