Forward StoryAdulthood – Forward Story

The Power of Opportunity Cost & Why You Should Use It

Mark L. Casey — Wed, 14 Feb 2024 20:38:55 +0000

Writing this article has been on my task list for over three months. I chose to do many other things instead of writing it. I will come back to this at the end…

What on earth is opportunity cost?

Opportunity cost can be defined as:

The value of what you have to give up in order to get what you want.

Another way to say this is that opportunity cost represents the benefits you give up in choosing one option over another option.

It can be difficult to identify opportunity costs when the benefits of the alternative choices aren’t easily measurable. Fortunately, some alternative choices are easily measurable. Let me give you a couple of examples.

Smart Phone

I first encountered the concept of opportunity cost in economics. It is rather easy to see when you put it in terms of money. If I spend $1,000 today on a new smart phone, that is $1,000 that I cannot invest in a stock mutual fund (for example). Doing a quick financial calculation, if I take that $1,000 and invest it in a mutual fund earning a 6% annual return compounding monthly, in 20 years the value will be $3,326. So the opportunity cost of purchasing the new smart phone today is $3,326 in 20 years. Of course, there is value in me having that smart phone today, so I may still choose it. I will just be better informed about the actual opportunity cost of that choice.

It’s a New Car!

One more financial example.

As a young person, I felt it necessary to always drive a nice, new car. I never had the money set aside to be able to pay cash for a nice, new car, so I financed it (aka I went into debt). This means I had a fat monthly payment to make to the lender that funded the loan on the car. The financing was typically four years. I had to make 48 monthly payments before the car was really mine. This reminds me of the old saying “I owe, I owe, so off to work I go.”

As vehicles became more and more expensive, car dealers began working with their finance arms to offer increasingly long loan payoff terms. This was to keep the monthly payments “low.” That meant that to buy a new SUV, I might be making that monthly payment for six years or even seven years.

Let’s not get too crazy with this example. I am going to use the four year loan length. Let’s say I buy an SUV for $40,000. I finance all of the price at 6% interest for four years. My monthly payment is then a whopping $939 per month! On top of that, I still have to insure it, register it, maintain it with oil and tires, repair it when it breaks down, and keep it gassed up. That is quite a commitment.

The problem with a vehicle is that it is a depreciating asset. It goes down in value with each passing day. Eventually, it will be worth nothing. How do I know this? Most of the vehicles I have purchased are now rotting in a junkyard somewhere or have been crushed into large cubes. The same can be said of the smart phone. It will eventually be worth nothing.

Thinking in terms of opportunity cost, what would that $939 per month car payment be worth if invested in a mutual fund with a 6% return compounding monthly? In four years it would be worth $50,819.

When I was buying cars this way, there was a related problem I faced. After about four years I was ready for a new car. After all, the new car smell had long since vanished. The paint had a scratch or two. So I repeated the process. I bought into the idea that “I will always have a car payment.“

So let’s go with that logic and assume that I will continue making that $939 car payment every month for 20 years. When we do that math, at the end of 20 years I will own a fourth “new” vehicle that is worth a lot less than when I bought it. That is what a depreciating asset is after all.

If instead of purchasing vehicles this way over the 20 years I instead invested that $939 per month into a stock mutual fund with a 6% annual return, my value in 20 years would be $434,000. Guess what? I could then remove $40,000 cash from my mutual fund and pay cash for a brand new vehicle.

“Wow!” you say. “Why doesn’t everyone do it this way?”

For several powerful reasons:

To actually do it this way you have to delay gratification and possibly drive (G A S P) an old car you pay cash for. Definitely no new car smell there.
To do this you have to be able to withstand the constant marketing and advertising of some of the smartest people on earth whose job it is to get you to “need” that new car smell. Think white Lexus, huge red bow on top, and snow lightly falling on you and your golden retriever.
Finally, you have to overcome the peer pressure that might come from those who could look down their noses at you for driving something they view as beneath your station in life. What would the neighbors say?

Once I really learned the lesson about opportunity cost with regard to cars, I became a little obnoxious about it. In an effort to help my kids learn the lesson, I would sometimes look at a parking lot full of expensive cars and say something like: “Look at all those beautiful depreciating assets.” They were not that amused.

One reason few of us do the opportuntiy cost calculations above is that there is indeed value in doing or enjoying something today. Driving in that new car smell, getting the latest smart phone, or having that daily cup of joe brings a certain amount of pleasure.

The concept of opportunity cost is not limited to financial matters. The reason I am a guitar plunker with a very limited skillset is because 10 years ago I prioritized other things above playing guitar. Those things may have been more important, but I still chose them over guitar. I wonder how many things we could all learn and accomplish if we didn’t binge-watch streaming entertainment? It takes a certain amount of vision to see beyond the present moment and to see what this moment could lead to if I chose a different opportunity.

In chapter 11 of my book Forward Story I write about vision: “Your mind has an amazing ability to visualize a future that has not yet occurred.Some of the greatest inventors and entrepreneurs that have ever lived had the ability to visualize their invention and how others would use it. They could see how it would make peoples’ lives better before it ever became a product. That is vision.”

You and I likewise have the ability to develop the vision to see the opportunity cost in anything we buy or in any way we spend our time and talents. We must nurture that kind of vision.

Conclusion

Back to the point I began with. Writing this post has been on my list for over three months. The reason it was not written before now is that I took the opportunity to do other things with my time. The reason it is being written now is because I chose it over all of the other things I could have done with this time. Such are the decisions we make.

My encouragement to myself and to you is to be more intentional about the opportunities we take. Pay attention to opportunity cost. Ask “Is this the best and highest use of my time, money, and talents? Ask “What am I giving up or postponing by choosing this option?”

One Day You Will Be a Face on a Wall

Mark L. Casey — Mon, 08 Apr 2019 16:44:50 +0000

Recently a friend from church told me that he had arrived at a great insight. He realized that one day he will just be a face on a wall of his descendants.

We all have faces on our walls or in our photo albums of people that we knew and loved that are no longer with us. Perhaps your children know who they are, but do your grandchildren? Will your great-grandchildren and beyond?

It is surely true of us that we will also one day be a face on a wall. This prompted my friend to write a document (you can call it a book if you like) where he reflected on his life. He wrote his memories about his grandparents, parents, and his own life experiences. In his words, “It is no masterpiece.” I beg to differ. I think to his descendants who will one day tie his words to his face on the wall it will indeed be a masterpiece.

What about you? First of all, what kind of story are you writing and living that embraces the reality of your own mortality? That is what Forward Story is really all about. Then, what can you do to ensure that those who follow in your footsteps know something about you and the kind of life you lived? What can you do to give them more than just your face in a frame on a wall?

Thanks to Forest for sharing this perspective.

Emily Brontë Died at Thirty

Mark L. Casey — Tue, 04 Apr 2017 15:14:59 +0000

How Old Are You?

My wife and I recently watched the movie To Walk Invisible about the Brontë sisters. These amazing sisters created some of the most enduring works of English literature.

The eldest sister Charlotte wrote Jane Eyre (Penguin Classics). The youngest sister Anne wrote Agnes Grey (Penguin Classics). The middle sister Emily wrote Wuthering Heights (Penguin Classics).

Their decision to write and publish under male pseudonyms is an amazing story of strategy and perseverance. Charlotte was “Currer Bell,” Anne was “Acton Bell,” and Emily was “Ellis Bell.”

As with all writers in their day, their work was conducted often by candlelight and always by hand with ink and quill on paper. I am writing this post in an online editor with cut and paste, auto-spell check, and the ability to publish to the world with one click of the “publish” button. It is hard to even envision the painstaking effort they expended to bring these works to readers.

There are many aspects to their story that I find amazing, but perhaps the thing that strikes me most is the fact that Emily Brontë lived only 30 years. In fact, her youngest sister Anne lived only 29 years. Charlotte lived only to the age of 38.

I do not measure myself against women who were among the most gifted writers in the English language, but I do draw two lessons from their lives:

Youth should be no barrier. If anyone told them they were too young, the Brontës did not listen. Some of us seem to be waiting until some magic future date when we are of sufficient age to do something important. Go ahead and do it now. Will you get better at it as you get older? Probably. Maybe. Maybe not. In the case of the Brontës, there was no getting older. Life is uncertain and short. That leads to the second lesson…
What are you waiting for? Go ahead and get started doing something you really want to do and need to do. Don’t wait for later and older. Do it now. Get it started. Do not let resistance paralyze you. If you plan to do creative work (writing, music, art, entrepreneurship), get a copy of The War of Art: Break Through the Blocks and Win Your Inner Creative Battles and let it motivate you. The main thing is to act. Now.

I have to confess that while we have had copies of both Jane Eyre and Wuthering Heights in our library for years, I have read neither. I am going to correct that soon. I think that as I read them knowing just how young these authors were when they wrote them, it will really reinforce the two lessons above.

Hopefully it will motivate me to act.

How old are you at present? If older than 30, take encouragement from what these young women did at a younger age than you. If you are younger than 30, follow the Bronte’s lead. Make it happen.

Important Book for Parents of Teens

Mark L. Casey — Fri, 03 Jun 2016 19:08:19 +0000

How does that teenage brain work?

At Forward Story we are always interested in information that relates to the way our bodies work and the way families work. I have discovered a book that deals with both. The book is The Teenage Brain: A Neuroscientist’s Survival Guide to Raising Adolescents and Young Adults

It’s a shame this book was not available when we were raising our teenagers. It might have made the whole experience even more enjoyable for both them and us. Having listened to an interview with Dr. Jensen, who is herself the mother of teenage sons, I believe this book can truly help you if you are a parent, or a grandparent of teens. Also, if you work with teens as a teacher, counselor, or mentor, I think you will be able to produce value from it as well.

If you read the book, please share with us what you think about it:

Threshing-machine – Melville [Quote]

Mark L. Casey — Thu, 11 Jun 2015 09:00:42 +0000

Truth is like a threshing-machine; tender sensibilities must keep out of the way. – Herman Melville from The Confidence Man.

The Confidence Man (Penguin)

How I Lost 50 Pounds (Part Three)

Mark L. Casey — Tue, 09 Jun 2015 15:05:18 +0000

The Role of the Large Intestine

Colon

In Part Two of this series we examined the structure of the small intestine and how nutrients are absorbed from the food slurry that moves through. The muscular process that keeps the slurry moving through the length of the small intestine is called the Migrating Motor Complex (MMC). This same process continues to move the slurry out of the small intestine and into the large intestine. Before we move on to what happens to the absorbed nutrients, we need to do a brief overview of the large intestine. The large intestine is also known as the colon. It is “large” in that it is larger in diameter than the small intestine. It is much shorter, though, as the colon is a little less than 5 feet in length. Under normal circumstances the process in the colon from entry to exit takes between fifteen and twenty hours.

Creative Commons Deed CC0

There are two primary functions of the colon that I want to mention.

Microbiome digestion. Your gut is populated by organisms that are not actually part of you in the way that your organs and cells are part of you. These are actually separate organisms that are the “good bacteria” that help with certain nutrients that could not be broken down higher in the tube. The reality of this colony still surprises and amazes me. When you see advertising for probiotics, it is this colony of bacteria in your gut that they are claiming their product will help you build and nourish. The common terms used for this colony of good bacteria are gut microbiome or gut flora. Certain foods we eat can help nourish and build the microbiome. This includes cultured foods like yogurt, drinks like kombucha and kefir, and fermented foods like sauerkraut. This microbiome breaks down certain nutrients and allows for the production of vitamin K and other vitamins. So, how many of these good bugs live in your colon? Believe it or not, they number in the trillions with a “t.” It is important to note that while most of the good bacteria is found in the colon, there are also beneficial bacteria that live in the small intestine. Many health issues occur when the good bacteria in the gut do not thrive and when bad bacteria do thrive. Here is an outstanding article on bacteria and the small intestine. I hope to write a separate article later with more detail on the microbiome of the nutrition tube.
Removal of liquids and formation of solid waste. While we did not mention it earlier, water has been absorbed already throughout the small intestine. Now as the process continues, the remaining water is absorbed into the body and solid waste is left in the colon to ultimately be eliminated from the body. The removed water ultimately ends up passing through the kidneys, into the bladder, and out as liquid waste.

There are obviously serious disorders and diseases of each component of the nutrition tube that require the expertise of medical professionals to diagnose and treat. The explanation I have provided in this series is my understanding of how a non-diseased gastrointestinal tract should work. Some of the disorders of the digestive system can be treated with a nutritional approach, but some require more aggressive intervention.

Conclusion

With that much too brief treatment of the colon, we have finished tracking the slurry through the complete nutrition tube from top to bottom. In the next article we will go back to the small intestine where we said that most of the nutrients from the slurry make it through the inner walls and are absorbed into the blood stream. Ponder the thought that these nutrients escape the nutrition tube and enter into your blood. Now they become part of you.

My next questions are:

What happens to these nutrients when they enter the blood stream?
How does the body make use of them, and how does that decision you made several hours earlier to eat 1,000 calories of doughnuts or broccoli impact the body’s chemistry and how those nutrients are used?

As with every question we have asked so far, these are actually very complicated questions. We will explore them in Part Four.

Don’t miss a post in this series. Subscribe to our newsletter to be notified when new articles are posted. In addition, you will receive my free eBook 15 Questions to Change Your Life.

Identify Your Gaps to Reach Your Goals

Mark L. Casey — Wed, 06 May 2015 14:44:34 +0000

Let’s say you are twenty-five years old and have a goal to become a ukelele player.

Or, let’s say you are fifteen and want to become a doctor.

Perhaps you are fifty-three with a strong desire to be a beekeeper.

Or, let’s say you are seventy years old and want to help relieve hunger in the third world.

Whatever your goals are, you need to identify the gaps between where you are now and what it will take to achieve those goals. What stands in your way? Before you can actually achieve your goal to become a ukelele player, a doctor, a beekeeper, or an aid worker, you have to be honest about what it is going to take to make that happen. If you allow your gaps to go undefined, your goal is just a dream that will likely go unrealized.

What do we do when we encounter a gap or chasm that we need to cross? We build a bridge.

Since some gaps are small and some are huge, there are bridges of all sizes. Some chasms are so large that a bridge is not possible. Have you noticed that there is no bridge from the United States to Ireland? That gap is just too large. We navigate that space in different ways.

Step 1 – Identify the Gap

These are the things missing in your life right now that must be bridged before you can reach the other side. Again, honesty is vital here. You will do yourself no favors by minimizing the task ahead or by lying to yourself about what it is going to take. Be brutally honest in defining the gap. What do you need to learn? Who do you need to meet? What certification do you need to achieve? How much do you need to pay? How long will this take?

Step 2 – Design Your Bridge

Break the bridge down into smaller steps. No one builds a bridge, or a house, or a nation without a plan. Use what you know about the gap you defined in Step 1 to create your plan for bridging the gap. Design it well so that you have confidence it will get the job done.

Step 3 – Start Building

Your bridge will be built by actions. Just as no bridge ever designed itself, no bridge ever built itself, either. The best bridge design in the world will bridge no gap if it is not actually built. Actions taken in the proper sequence will lead you to build the proper bridge and reach your goal. Establishing and following great habits is a key to making these actions effective.

Step 4 – Glance Behind You and Take Heart

Once you have built your bridge and crossed the gap, you will have achieved your goal. Now is a good time to look back over your shoulder at the bridge. See that bridge for what it really is. It is a testimony of the power you possess to envision a Forward Story, to design the practices necessary to achieve it, and to follow through on that design to realize your goal. You should now realize that you can do that over and over again. None of us truly arrive at a point where we have no ambition left. The sense of accomplishment you get from crossing the bridge and achieving a goal provides a powerful shot of confidence that you can use on bridging your next gap.

My gaps are currently gaps in taking my business to the next level and in my health goals. In other words, I am currently working on bridging more than just one gap. I have a couple of bridge-building projects going on right now. As Step 4 explains, I have bridged enough gaps in the past to have confidence that these current bridges that are under construction will take me where I want to go.

What gaps are you trying to bridge at the moment? How is it going?

How to Nurture a Positive Habit

Mark L. Casey — Wed, 22 Apr 2015 15:46:40 +0000

You and I both understand the power of habit. As humans we are wired to repeat behaviors over and over again. Sometimes those habits are “good” in that they lead to excellent outcomes. Other times those habits are “bad,” leading to poor or even deadly outcomes.

I am assuming you can do a quick survey of your life and pick a few bad habits you would like to kick and a few good habits you would like to establish.

Me, too.

Lately through reading, conversation, and experimentation I have learned some helpful things about nurturing positive habits. I will leave kicking bad habits for another day.

There are two methods I have proven (to myself) to work, and there is one that I am eager to try soon. Here they are:

1. Seinfeld’s Red-X

Some experts disagree on how long a behavior has to be repeated until it becomes a habit, but a good number to shoot for is two weeks. If I can do something for two weeks, I will usually incorporate it into my life. Jerry Seinfeld’s method has really worked for me. It is a simple idea. You print a calendar and draw a red X on each day in which you do the behavior. Then string them together with the goal of “Don’t break the chain.” Doing this small practice can lead to big things. It is how I finished writing my book. It can be the way you finally accomplish that thing you have been wanting to do.

2. Write a Journal

This one requires only that you keep some kind of notebook or journal where you date each day and make an entry related to your desired behavior. If the goal is to excercise thirty minutes each day, the entry for today as I write this might be:

April, 22, 2015

Exercise Journal

Today I walked 35 minutes at 6 a.m.

Keeping a log or journal like this helps keep me accountable. It also provides a record which I can review to draw inspiration from.

3. Clear’s Paper Clip Trick

James Clear writes often (and well) on habits and behavior. While I regularly practice the first two ideas above, I have not yet tried this one. However, I will be trying it soon. The idea is that you start with two jars. One contains paper clips (or push pins or pennies, etc.) and the other is empty. When you complete the desired behavior, you move a paper clip from the starting jar into the empty jar. There is some strategy to choosing how many clips to start with. In my case I will use it to help me stay on track with some of the more mundane aspects of my daily work. If I need to make fifteen phone calls, I will start with fifteen paper clips. For more on this strategy, please read Clear’s excellent article here.

How do you nurture good habits? What works for you?

How to Find Your Dream Job

Mark L. Casey — Tue, 27 May 2014 19:20:44 +0000

This is graduation season. A lot of freshly minted graduates are streaming out of our colleges, high schools, and technical programs. A lot of new graduates are looking for their dream jobs.

How do you find your dream job?

I want to share some insight from a good friend of mine named Bill Martin. Bill is an octogenarian with a lot of wisdom. If I told you his entire career history you would be amazed at this man’s success. If you could meet him, you would be amazed by his humility and charm.

He recently spoke to engineering graduates about how to find their dream jobs. Here it is in all its wisdom and simplicity:

Get a job. Work hard and do great at it.
Get a better job. Work hard and do great at it.
Keep repeating this until you…
Get your dream job.

I sort of understood this when I was young. I did not expect to have a dream job right out of the gate. I knew it was out there if I worked and produced value for my employers. A job well done leads to a recommendation and to advancement. The idea of an entry-level position is that you do not stay there long. It is simply where you enter.

In your pursuit of a dream job, don’t forget to get a job and do really well at it. That will lead to good things.

Thanks, Bill!

Update: Planting Seeds for the Future

Mark L. Casey — Tue, 25 Mar 2014 15:01:01 +0000

About ten months ago I wrote a post about my first effort at growing a plant. I had never even tried it before, so there was a lot to learn — still is. The main point was that in order to reap anything in the future, you first need to plant seeds and tend them over time.

I have been watering, feeding, and tending those jalapeno plants over the winter months. The first day that my wife saw our first pepper was surprisingly exciting. The cycle from seed to first fruit is one of the most common processes in nature, but I hope I never lose the wonder of it all.

I have given away one of the jalapeno plants to a neighbor and still have five. Now that spring has arrived, I am almost to the reaping stage. Those five plants currently have 24 peppers growing and are nearing harvest time. Here is a photo I snapped this morning of two of the peppers on one of the plants:

This experience has energized me to plant more. I now also have growing two varieties of tomatoes and the herbs cilantro, parsley, basil, mint, oregano, and thyme.

A few quick takeaways:

If you want something good to happen in the future, you must take the steps today to get it started.
You have to stick with it through periods of time when it appears little to nothing is happening.
Waiting can be boring.
You must continue tending, watering, feeding, and weeding your dream.
If you consistently do these things, you will likely have the good thing you desire.

Forward StoryAdulthood – Forward Story

The Power of Opportunity Cost & Why You Should Use It

Smart Phone

It’s a New Car!

Conclusion

One Day You Will Be a Face on a Wall

Emily Brontë Died at Thirty

How old are you at present? If older than 30, take encouragement from what these young women did at a younger age than you. If you are younger than 30, follow the Bronte’s lead. Make it happen.

Important Book for Parents of Teens

Threshing-machine – Melville [Quote]

How I Lost 50 Pounds (Part Three)

Colon

Conclusion

Don’t miss a post in this series. Subscribe to our newsletter to be notified when new articles are posted. In addition, you will receive my free eBook 15 Questions to Change Your Life.

Identify Your Gaps to Reach Your Goals

What gaps are you trying to bridge at the moment? How is it going?

How to Nurture a Positive Habit

1. Seinfeld’s Red-X

2. Write a Journal

3. Clear’s Paper Clip Trick

How do you nurture good habits? What works for you?

How to Find Your Dream Job

Update: Planting Seeds for the Future

Any experiences you want to share about dreams you have worked to achieve or your experiences along the way? Was your vision and hard work rewarded?