The problem is you think you have time
The only time you’ll ever be certain of is the present.
In this one:
The cost of opportunity
These opportunities might cost you
The cost of lost time
Also, a timely announcement at the end. Take a look after the read. For now, let’s grow.
EXPLAINER
Time, value and money pt. 2 - The cost of opportunity
You invest to make money work for you, because you have traded your time and energy to work for the money — in most cases at least.
In essence, you’re deploying limited resources in the present, in exchange for another limited resource – money.
To complete this trade, you then take the money you receive and put it into things that you expect to give you a beneficial result in the future.
You deploy the money because of how money works.
You know that inflation gradually eats away at the value of money that sits idle. At the same time, today’s financial system offers ways to counteract this loss through interest or capital gains. This is why money shouldn’t just be held and accumulated; it must be put to work through investing.
Money is a tool, not a trophy.
But how do you decide where to put your money? It’s as much art as it is science. Let’s briefly discuss the science.
Opportunity cost can be simply defined as the loss of potential gain from other alternatives when one alternative is chosen. Sound familiar? It should because it is the essence of choice or decision making – financial or otherwise.
Less simply and more technically:
The opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had if the second best available choice had been taken instead. –SourceOpportunity cost and the time value of money are closely linked. Both concepts remind us that money isn’t just about what we have now, but what it could become depending on our present choices.
With money, every choice—spending, saving or investing—carries an opportunity cost, whether you're aware of it or not.
Every financial decision you make carries an unseen trade-off: holding cash instead of investing it means forgoing potential returns, whereas choosing one investment over another means sacrificing the growth that the alternative might have provided.
The time value of money highlights why money put to work today is more valuable, and opportunity cost makes us conscious of the options left unexplored.
Appreciating both concepts helps investors make better decisions—not just based on what they have, but on what they could gain (or lose) over time. It helps them assess risk vs. reward. It is fundamental toward informed investing.
THE BUFFET
Actions speak louder than words
Not all money moves are created equal. The three words below are often wrongly used interchangeably but they serve different purposes. Misunderstanding them can cost you.
Saving is setting aside money in a safe place for future use, prioritizing security over growth.
Goal: Preserve capital and keep funds easily accessible when needed (i.e. liquidity)
Trade-off: You avoid market risks but lose purchasing power over time due to inflation
Investing is committing money to assets with the expectation of long-term growth and returns.
Goal: Build wealth steadily through appreciation and income
Trade-off: Requires patience and risk tolerance, but time increases your odds of success
Speculating is placing money in high-risk opportunities, hoping for quick and substantial gains.
Goal: Aim for quick gains by taking high-risk financial bets.
Trade-off: Higher potential rewards come with a greater risk of loss
You may think you’re investing while doing something entirely different. Investing balances risk and return over time—unlike saving, which avoids risk but limits growth, or speculating, which seeks high returns but magnifies risk. Knowing what you are or aren’t doing helps you make smarter financial decisions.
Clarity will spare you heartache and lost sleep. In all you do, the goal is to be clear.
NOTES
On putting things off for later
We’re constantly running out of time with each tick and tock of the clock.
If time is money and you want to be rich, then you need ‘more time’. So how can you get more of it? Through actions.
Procrastination is a habit. One we all have, but one that’s good to be bad at. And yet we practice it almost daily.
It’s a habit that we all develop as we transition through childhood and start to understand time better (as much as a child can anyway).
Even high performers have to face procrastination. The difference between them and others is that they have a heavy bias for action. Because they persist in the present. That’s the only place where you have ink in the pen that’s writing your life story. Many times, they truly live or play or work like each day could be their last.
This is really important because…we like to put things off for later.
The problem is you think you have time.
Why put off to tomorrow what you can do today?
It’s important to plan, obviously. But don’t let planning become the reason you give yourself for inaction.
You can get stuck making plans. Or you can capture the now and learn through action. You really don’t know the outcome of any action unless you take it. And you also don’t know how much time you have left.
Don’t let it run out with you saying, “...If only I had a little more time.” That wish only comes true in the present. You only have now.
So what is the opportunity cost of time? It depends on the value we assign to it.
We assign value to time by what we choose to do with it.
For things that hold true meaning, “later” is often too late.
When you procrastinate, you try to save energy for later and not give your all in the moment. It’s an investment decision. But you know it's often a costly one.
If you think of time in the same way as you do money (sometimes at least), you will realize that an action bias is a sure way to get more out of your limited time.
So act. It may not go your way, but you will be much wiser, much sooner.
That’s one way of buying time.
"The secret of getting ahead is getting started."
–Mark Twain
Opportunity calls
Why won’t you have enough time today?
Because yesterday you said tomorrow.
When you procrastinate, you steal time from your future self.
Tomorrow is here.
AG
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