Opportunity Cost

Opportunity Cost

1.     Is the value your giving up by making a decision

a.     Absence is an inability blindness to pay attention to what is not present

       i.     Diminishing Returns

Time value of money

By Martin De Azpilcueta 16th century

1.     A way to make decisions

a.     Opportunity cost

b.     Next best alternative

c.      On the max you should pay for abusiveness that earns present value

Compounding-Accumulation over time

o   Create a positive feedback loop.

Leverage-using borrowed money to magnify retention gains

A form of financial amplification for gains and losses.