An Exercise In Opportunity Cost

When a new technology emerges, we often naturally draw comparisons to familiar concepts. A prime example is the recent debut of Apple’s Vision Pro, which has ignited parallels with the decade-old Google Glass. While the majority are discussing the technical similarities and differences between the two, a compelling conversation around the concept of opportunity cost has caught my attention. 

An interesting question was presented in a recent article: What if you had chosen to invest $1,000 in Google’s stock instead of shelling out it on Google Glass in 2012? 

Let’s dive into the numbers. According to the article, your $1,000 would have netted you about 1.66 shares of Google stock in 2012. After factoring in stock splits over the years, you’d own 66 shares today. As of last week, these would be valued at $128 per share or $8,500.

This raises the question: Did your purchase of Google Glass really set you back $1,000, or was it a costlier $8,500 in missed opportunity? 

Accruing after-tax dollars in your personal bank account is among life’s more challenging tasks. Therefore, grasping the true value of those hard-earned dollars is a cornerstone of financial success. Business leaders should prioritize establishing profit goals ahead of revenue targets. In personal finances, shift your focus from income to net worth goals. Such a change in perspective could prove invaluable in making informed decisions over time, prompting you to reconsider how and where to invest after-tax dollars.

Remember: The actual cost of depreciating items extends beyond the purchase price — it includes the opportunity cost as well.

TOPICS: MSP advicepersonal successtechnology success
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