We must make choices. We must make sacrifices; we must choose things not to do. That means, we absolutely must, consciously or not, consider opportunity costs every time we use money. Opportunity costs are alternatives. They are the things that we give away, now or later, in order to do something. These are the opportunities that we sacrifice when

the 3-lens principle: View opportunity costs through these three lenses: (1) Compared with what? (2) And then what? (3) At the expense of what?

Let’s say you decide to quit your $50,000-a-year job and start a business. Starting the business will certainly have costs of its own, but it will also cost you the $50,000 you would have made had you stayed at your job. Opportunity Cost is the value you’re giving up by making a Decision.