Opportunity Cost

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In the world of finance there is something called the opportunity cost, which is the hidden cost of taking one choice versus another.

Let's use buying $20,000 car as a practical example...

If you have the cash to buy the car is it better to pay with cash or finance the car? 

You can own the car outright by paying cash but there could be a tremendous opportunity cost that you are missing out on in all the interest you could have been making on the money.

These days car loans are about 2-3% so here is some math...

$20,000 @ 2% over 5 years = Total cost of the car $22,081

If the $20,000 was invested at 5% per year you would have $25,525 after 5 years. This means that by financing the car and investing the money instead you made an additional $3,444 over 5 years. 

If the money was invested at 15% per year, which is possible, you would have $40,227 after 5 years. 

So in this case the hidden opportunity cost of paying cash could actually be $40,227 - $22,081 = $18,146.over 5 years and these are not unrealistic numbers by any means. By paying cash the opportunity to almost double your money was lost. 

In a similar way when we are positioned in unforgiveness or complaining there is a huge opportunity cost because we shut off the flow of what God has made available to us. When we choose to magnify problems instead of God there is a hidden opportunity cost. Where we put our focus and attention and how we use our time and resources all have opportunity costs. 

In today's communion we are thanking God that he is with us and wants to help us make the most of every opportunity. We are also asking for his help to make the most of every opportunity and to restore opportunities that were lost.  

I am praying for you. 

Daniel