Time Valuer / Resources / Glossary / Opportunity cost
Opportunity cost
The value of the best thing you gave up to do something else. With time, it's what those hours could have earned or achieved.
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What it means
Every hour spent on one thing is an hour not spent on another. Opportunity cost names the trade so it can be weighed.
It explains why saving a little money can be expensive: if the time it takes is worth more than the saving, you've lost.
Example
| Drive across town to save | $30 |
| Time it takes | 2 hours |
| Value of 2 hours at the $250,000 goal | $240 |
| Real result | −$210 |
In Time Valuer
Time Valuer puts a price on the hours behind any choice, so the opportunity cost is a number you can see before you decide.
Related terms
Questions and answers
What is opportunity cost?
The value of the best thing you gave up to do something else. With time, it's what those hours could have earned or achieved.
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