Balance

The Simple Life, The Good Life // Book Summary of Greg McKeown’s ‘Essentialism’

August 21, 2019 By Nagesh Belludi Leave a Comment

One of the great struggles of modern life is the intense complexity, chaos, and exhaustion of activity and reactivity. We have a tendency to take on too much, become accountable to too many people, and say ‘yes’ to too many demands on our time and our energy.

As I mentioned in my world’s shortest course on time management, the merits of ignoring the trivial many and focusing on the vital few is often overlooked. The need for essentialism—less responsibility, less fame, less money, fewer possessions, less mess—is something that’s easy to identify with, but requires abundant self-discipline to put into consistent action.

Business consultant Greg McKeown’s Essentialism: The Disciplined Pursuit of Less (2014) is an excellent reminder that a rich, meaningful life entails the elimination of the non-essential:

Essentialism is more than a time-management strategy or a productivity technique. It is a systematic discipline for discerning what is absolutely essential, then eliminating everything that is not, so we can make the highest possible contribution toward the things that really matter.

McKeown’s wide-ranging discussion covers insightful get-a-hold-of-your-life principles—frugality, sufficiency, moderation, restraint, minimalism, and mindfulness—reframed in the essential-avoidable dichotomy. Here are prominent insights from Essentialism:

Get to grips with selectivity—whenever you can, judiciously select which priorities, tasks, meetings, customers, ideas or steps to undertake and which to let go. “The basic value proposition of Essentialism [is,] only once you give yourself permission to stop trying to do it all, to stop saying yes to everyone, can you make your highest contribution towards the things that really matter.”
Most top performers have one thing in common: they accept fewer tasks and then fixate on getting them right. “Essentialism is not about how to get more things done; it’s about how to get the right things done. It doesn’t mean just doing less for the sake of less either. It is about making the wisest possible investment of your time and energy in order to operate at our highest point of contribution by doing only what is essential.”
If you don’t arrange your life, someone else will. “When we forget our ability to choose, we learn to be helpless. Drip by drip we allow our power to be taken away until we end up becoming a function of other people’s choices-or even a function of our own past choices. In turn, we surrender our power to choose. That is the path of the Nonessentialist. … The Essentialist doesn’t just recognize the power of choice, he celebrates it. The Essentialist knows that when we surrender our right to choose, we give others not just the power but also the explicit permission to choose for us.”
Pop out at least once a year to reflect and ask questions about what you’re doing and why. “The faster and busier things get, the more we need to build thinking time into our schedule. And the noisier things get, the more we need to build quiet reflection spaces in which we can truly focus.”
Pursue a well-lived, joyful, meaningful life. “The life of an Essentialist is a life lived without regret. If you have correctly identified what really matters, if you invest your time and energy in it, then it is difficult to regret the choices you make. You become proud of the life you have chosen to live.”

Recommendation: Speedread Greg McKeown’s Essentialism: The Disciplined Pursuit of Less. It will remind you of the wisdom to think through—and act upon—what really matters. Essentialism is chockfull of useful instructions on how to say ‘no’ gracefully, exercise your freedom to set boundaries, discover the power of small wins, and harness the power of routines to evade the pull of nonessential distractions that can subsume you easily.

Do Your Team a Favor: Take a Vacation

August 7, 2019 By Nagesh Belludi Leave a Comment

Everyone understands that a manager should make time to check out and recharge. Yet, there’s an expectation that he remains available, plugged in, informed, and accessible while on vacation. Therefore, even when he does go away, he doesn’t truly get away.

Even the hardworking manager, when overwhelmed and overcommitted, can become a bottleneck. Refusing to take a break not only burns him out but also wreaks havoc on his team’s productivity—it hinders necessary skills building and succession planning. By butting in whenever he can, he subtly undermines his team by insinuating that his team members cannot run things on their own.

In 2012, the contact management company FullContact was in the limelight when it announced a “Paid PAID Vacation” policy. It offered its employees $7,500 every year to go on vacation with the stipulation that the employee totally disconnects. FullContact CEO Bart Lorang explained why employees and their teams can be better when they disconnect:

Once per year, we give each employee $7500 to go on vacation. There are a few rules:

You have to go on vacation, or you don’t get the money.

You must disconnect.

You can’t work while on vacation.

If people know they will be disconnecting and going off the grid for an extended period of time, they might actually keep that in mind as they help build the company. For example:

They might empower direct reports to make more decisions.

They might be less likely to create a special script that isn’t checked into GitHub [software development repository] and only lives on their machine.

They might document their code a bit better.

They might contribute to the Company Wiki and share knowledge.

Get the picture? At the end of the day, the company will improve. As an added bonus, everyone will be happier and more relaxed knowing that they aren’t the last line of defense.

Idea for Impact: Take a vacation. Empower your team. When a smart manager goes on vacation, he leaves clear directions about the critical situations under which his team should contact him. While he mentally checks out, his team members get the opportunity to stretch and show their individual and collective mettle.

How to Prevent Employee Exhaustion

November 8, 2018 By Nagesh Belludi Leave a Comment

Feeling exhausted, irritated, unhappy, and lacking in control are all signs of burnout—a temporary decline in an employee’s well-being.

If you notice a drop in energy, motivation, or productivity, try these simple ways to help combat employee exhaustion:

Clarify expectations
Where possible, lower the standards and relax the deadlines. Encourage less perfection.
Give employees the right tools and resources that they need to do their job effectively
Allocate some tasks to other employees
Appreciate, reward, recognize
Give employees some time off
Reduce travel and meetings
Offer counseling and mentoring

Employee stress and problems at work that are not dealt with effectively can quickly spill out into other parts of an employee’s life. In fact, many marriages go bad when stress at work is at its worst: people use up all their willpower on the job; their home lives suffer because they give much to their work.

Make employee welfare a key area of focus to promote better work environments and keep employees engaged.

I’ll Be Happy When …

October 19, 2018 By Nagesh Belludi Leave a Comment

It is fallacious to let life slip away in the pursuit of the illusion that, “When I achieve something, I will be free to live in happiness.”

If you pursue a job, a relationship, a house, a material possession, or the settlement of a debt, happiness will never come because there is always another “something” that will follow the present one. The circumstances that you thus wait for do provide a transitory elation, but, too soon, they withdraw into the dull and mundane, only to be replaced by the next fantasy of happiness.

The Art of Simple Existence is One of the Most Difficult to Master

According to Buddhism, the art of simple existence is one of the most difficult to master. If you aren’t living in peace and happiness at this moment, you’ll never be able to. If you truly want to be at peace, you must be at peace right now. Otherwise, there is only the aspiration of peace “someday when I accomplish something.”

The experience of pleasure, freedom, and love are available now, whatever your circumstance. The American clinical psychologist John Welwood reminds us of this in Ordinary Magic: Everyday Life as Spiritual Path:

Our society would have us believe that inner satisfaction depends on outer success and achievement. Yet struggling to “get somewhere” keeps us perpetually busy, stressed out, and disconnected from that essential inner resource—our ability to be fully present—which could provide a real sense of joy and fulfillment. Our life is unsatisfactory only because we are not living it fully, but instead we are pursuing a happiness that is always somewhere else, other than where we are right now…

Cultivating the capacity to be fully present—awake, attentive, and responsive—in all the different circumstances of life is the essence of spiritual practice and realization. Those with the greatest spiritual realization are those who are “all here,” who relate to life with an expansive awareness that is not limited by any fixation on themselves or their own point of view. They don’t shrink from any aspect of themselves or life as a whole.

Idea for Impact: When One Lives, One Must Live Entirely

However difficult your circumstances, however uncertain the times, peace is not to be earmarked for a future time. The definitive source of happiness lies in the quality of your thoughts. Real sustainable peace springs from a healthy and nurturing relationship with yourself. Let nothing and nobody take that away from you. Don’t postpone being at peace.

Why I’m Frugal

October 1, 2018 By Nagesh Belludi Leave a Comment

Frugality Over the Ages: Frugality as a Virtue

Frugality Over the Ages

From Socrates to Thoreau, from Franklin to Gandhi, philosophers, moralists, and spiritual leaders have identified frugality as a virtue and associated simple living with wisdom, integrity, and happiness. The Cynics were the first to reject wealth, power, sex, fame, and other desires in favor of a simple life free of all possessions. Diogenes the Cynic (portrayed in image) famously lived in a wine barrel and had no worldly goods.

For the Puritans, the love of material consumption was an evil; their spiritual doctrine stressed, in the words of the American historian Edmund Morgan,

A man was but the steward of the possessions he accumulated. If he indulged himself in luxurious living, he would have that much less with which to support church and society. If he needlessly consumed his substance, either from carelessness or from sensuality, he failed to honor the God who furnished him with it.

Founding Father Benjamin Franklin, a doyen of the self-improvement movement, listed frugality as one of the 13 virtues he followed as a young man. Between 1732 and 1757, Franklin published such famous aphorisms in his Poor Richard’s Almanack as “be industrious and frugal, and you will be rich,” “beware of little expenses; a small leak will sink a great ship,” and “he that goes a-borrowing goes a-sorrowing.”

For the American philosophers Ralph Waldo Emerson and Henry David Thoreau, frugality or “transcendental simplicity” was a means to a higher end. In Man the Reformer (1841,) Emerson wrote, “Economy is a high, humane office, a sacrament, when its aim is grand; when it is the prudence of simple tastes, when it is practiced for freedom, or love, or devotion.” For Thoreau, “high thinking was preferable to high living;” he wrote in Walden (1854,) “Most of the luxuries, and many of the so called comforts of life, are not only not indispensable, but positive hindrances to the elevation of mankind. With respect to luxuries and comforts, the wisest have ever lived a more simple and meager life than the poor”.

Thoreau inspired the Russian novelist Leo Tolstoy. After suffering a mental breakdown in the late 1870s, Tolstoy, who was born into Russian nobility, rejected his family’s estate and serfdom. He renounced his decadent, racy lifestyle and engaged in a revolutionary brand of Christianity based on spiritual and material austerity.

Tolstoy’s philosophy showed the way for the creation of utopian communities of simple, self-sufficient living—the most famous example being the “Tolstoy Farm” ashram that Mahatma Gandhi established in South Africa. Gandhi was the quintessence of simplicity and sported austere homespun clothing. He famously said, “you may have occasion to possess or use material things, but the secret of life lies in never missing them,” and “our civilization, our culture, our [nation] depend not upon multiplying our wants—self-indulgence, but upon restricting our wants—self-denial.”

Frugality is a Moral Virtue

The distinguished career coach Marty Nemko once wrote, “I even take care to tear-off single sheets of toilet paper. Because I’m cheap? No. Because it’ll help the environment? No. I just think wasting is wrong.” That, in a nutshell, is why I’m frugal.

For me, frugality suggests an appropriate limit on individual and collective desires; it denies the materialistic expectations that the modern society imposes upon us.

Frugality is not some form of world-denying asceticism or austerity. It is a part of principled stewardship of not only the resources I’ve been blessed with but also of myself.

Frugality is about forgoing a subset of desires—as part of a quest for an abundant life. In other words, frugality restricts my indulgence of materialistic appetite, with the intention that I leave space for the cultivation of diverse forms of pleasure.

When I started to work while still in college, frugality was an element of my quest for financial independence. It became the lynchpin of a deliberate set of lifestyle choices and values. But my focus on achieving financial freedom never let me pining for the pleasures I might have had.

Six years ago, I gave up a corporate job and significant earnings in favor of a simpler life with plenty of discretionary time and money for world travel, leisure, learning, culture, and meaning.

Idea for Impact: Enjoying a rich life is more important than zealously stewarding one’s savings and investments.

Living frugally, with the particular intention of achieving financial freedom, requires a good measure of renunciation. This renunciation is easiest when one regards it not as deprivation, but as a deliberate choice in a trade-off for an enriched life.

How Mindfulness Can Make You Better at Your Job // Book Summary of David Gelles’s ‘Mindful Work’

April 4, 2018 By Nagesh Belludi Leave a Comment

Mindfulness Simply Means Being Aware and Being Present

Most religions and spiritual practices encourage some sort of meditation and mindfulness. However, the specific practice of bringing your attention and your focus to the present moment, and observing and accepting the experience as is, is most commonly associated with the Eastern meditative traditions.

Mindfulness is an element of the Buddhist Noble Eightfold Path to nirvana (enlightenment.) The Buddha taught that a mistaken perception of reality inevitably leads to suffering. Mindfulness is the primary means of bridging that gap between how things seem to be and how they really are.

Attending to What Happens to Our Minds, Hearts, Attitudes, and Actions

In its secular form, mindfulness is but a practice of consciousness. It is heedfulness or awareness of your subjective thoughts, behaviors, and experiences—without evaluating or judging them.

Mindfulness can help you, through direct experience, become more comfortable with your life and to be better able to cope with the problems and issues in your daily life.

The heightened mental receptivity, together with an increased sensitivity to the environment, better openness to new information, and a sharper decision-making are understood to produce a great number of physiological and psychological benefits.

Mindfulness is the Best Antidote to Anxiety

In a world that barrages us with information and demands us to be incessantly active and reactive, mindlessness is being embraced increasingly in the mainstream culture. As a supplement to yoga, and without any specific religious association, mindfulness is today practiced as a way to prevent being swept away in an avalanche of thought, activity, and emotion.

David Gelles’s Mindful Work: How Meditation Is Changing Business from the Inside Out provides a remarkable account of the ever-increasing adoption of meditation-based mindfulness. Prominent American corporations such as Google, General Mills, Aetna, and Ford have built mindfulness-themed employee wellness initiatives to foster a happier, more productive workplace.

Gelles brings a business journalist’s objectivity to draw together his experience of practicing meditation for 15 years. He also reviews scientific research that has evidenced how people who have a mindfulness routine are less distractible and better at concentrating, even when multi-tasking.

Scientific research is making the benefits clear. Studies show that mindfulness strengthens our immune systems, bolsters our concentrative powers, and rewires our brains. Just as lifting weights at the gym makes our muscles stronger, so too does practicing mindfulness make our minds stronger. And the most tried-and-true method of cultivating mindfulness is through meditation.

Gelles discusses the teachings of many key influencers in the development of the mindfulness movement. The rising popularity of meditative mindfulness in the West has its genesis in a retreat organized in the ’70s by Thich Nhat Hanh, a Zen Buddhist monk and teacher. One of his attendees, the University of Massachusetts psychologist Jon Kabat-Zinn, integrated Hanh’s teachings with yoga and medical science, and created the popular eight-week “Mindfulness-Based Stress Reduction” course. Over the decades, other psychologists developed mindfulness-based interventions that allow patients to observe their cognitive and behavioral processes.

Gelles summarizes much of the recent research that has confirmed the centuries-old Eastern wisdom about mindfulness practices. Developments in contemplative neuroscience have corroborated the effects that meditative mindfulness has on supporting the body’s immune system and counteracting the symptoms of burnout.

Indeed, mindfulness seems to change the brain in some specific ways. Broadly speaking, mindfulness increases activity in parts of the prefrontal cortex, an evolutionarily recent region of the brain that is important for many of the things that make us human. This region is the seat of much of our higher-order thinking-our judgment, decision making, planning, and discernment. The prefrontal cortex is also an area that seems to be more active when we are engaged in pro-social behavior—things like compassion, empathy, and kindness.

Some studies have shown that folks who practice meditation have a less perturbed amygdala. That means that the brain is less vulnerable to interpreting many flight-or-fight stimuli as threats and triggering anger, stress, or a defense reaction.

Meditative Mindfulness in the Emerging Context of Consumer Culture

Gelles warns that capitalism and commercialization could, due to many increasingly-visible entrepreneurial teachers, complicate something as seemingly simple as observing one’s breath and paying attention.

I’m sympathetic to the skeptics, who worry that a noble practice is being quickly corrupted by modern marketing. But having witnessed mindfulness in action for fifteen years, it is clear to me that rarely, if ever, does exposure to meditation make someone a worse person. On balance, the folks who become more mindful tend to be happier, healthier, and kinder. Nevertheless, it is worth addressing the various critiques of mainstream mindfulness, if only to put them to rest.

…

Even today, some of the most popular gurus in America have demonstrated a penchant for bling that strikes many as being out of touch with their mantra of inner peace. Bikram Choudhury, the litigious yoga teacher, cuts the figure of an oligarch, driving around Beverly Hills in a Rolls-Royce and sporting a gold-encrusted Rolex. A Thai monk with a taste for Louis Vuitton luggage and private jets had his assets frozen by authorities in 2013.

A Few Minutes a Day is All You Need to Reap the Benefits of Mindfulness

Recommendation: Read David Gelles’s Mindful Work. This helpful tome offers a succinct rundown of the benefits of mindfulness. In an era where our culture is increasingly questioning the frenzy of activity and reactivity that has entrenched the current way of life, mindfulness will continue to draw many mainstream practitioners for its ability to promote stress-reduction and produce improvements in one’s overall emotional state and outlook on life.

Indeed, mindfulness is about much more than simply observing sensations as they occur. It is about what happens to our minds, hearts, and actions when we deliberately continue these practices for weeks, months, and years. Mindfulness is a practice that allows us to achieve more sustainable happiness and to grow more compassionate. And over time, mindfulness requires one to confront thorny concepts like impermanence and compassion.

Warren Buffett’s Advice on How to Focus on Priorities and Subdue Distractions

December 8, 2017 By Nagesh Belludi Leave a Comment

If you persistently experience an overpowering sense of being besieged with tasks and responsibilities, perhaps a personal productivity transformation technique suggested by Warren Buffett may help.

Psychologist Angela Duckworth of the University of Pennsylvania shares a well-known anecdote about Buffett in her bestselling Grit: The Power of Passion and Perseverance:

The story goes like this: Buffett turns to his faithful pilot and says that he must have dreams greater than flying Buffett around to where he needs to go. The pilot confesses that, yes, he does. And then Buffett takes him through three steps.

First, you write down a list of twenty-five career goals.

Second, you do some soul-searching and circle the five highest-priority goals. Just five.

Third, you take a good hard look at the twenty goals you didn’t circle. These you avoid at all costs. They’re what distract you; they eat away time and energy, taking your eye from the goals that matter more.

As I’ve written before (see the world’s shortest course in time management, and detailed three-step course on time logging, time analysis, time budgeting,) the most effective time management practice involves eliminating the non-essentials—those numerous things you can and want to do—and focusing on the very few things you must do.

Idea for Impact: Success comes at a cost: the most time-effective folks I know are significantly better at dropping their second-rate objectives.

How to Combat Burnout at Work

October 11, 2017 By Nagesh Belludi 1 Comment

Employee burnout, the slow and steady physical and psychological fatigue and depletion caused by one’s work-life, reflects a fundamental challenge of working life.

Burnout is characterized by reduced personal accomplishment, physical exhaustion and unremitting weariness, feelings of despair and helplessness, and cynical attitudes toward work, life, and people.

Many people work in situations that are conducive to burnout. The prevalence of demanding job characteristics and the pressures of collegial and supervisory relationships, together with inadequate job resources and motivational job characteristics can trigger burnout.

If you’re feeling worn out, overwhelmed, even depressed at work, here’s how to nurse your exhaustion before it escalates into a burnout:

Investigate ways to limit or disconnect exposure to stress-initiators. First, understand and rank all the triggers of stress. Reflect on your existing responsibilities and relationships at work, and identify any element that strains your enthusiasm or diminishes your energy.
Restructure your work. If you’re dealing with excessive job demands and are provided with inadequate job resources, try to discard low-gain and high-pain tasks and responsibilities. Ask for more resources, and reach out to people you find supportive and motivating. If all else fails, lower your standards.
Seek opportunities for psychological detachment from work. Stop thinking about work during your leisure time and disengage yourself mentally from work.
Nurture yourself. Your needs belong to the top. As you make your way through a busy life, don’t ignore prioritizing taking care of yourself. Don’t surrender, settle, or lose hope. Don’t compromise yourself and become what you can settle for.

Office Chitchat Isn’t Necessarily a Time Waster

October 4, 2017 By Nagesh Belludi Leave a Comment

When Employees are Happy, They Work Better

Managers who disapprove and clamp down on impromptu encounters that people have at their desks, in the hallways, by the elevators, in the lunchroom, or by the water coolers can create a work environment that’s unpleasant, even repressive.

If truth be told, what may seems like idle chitchat actually forges links between people and encourages a culture of openness that can help people work toward common goals.

Informal, spontaneous conversations between coworkers, especially between colleagues from different departments, will not only give people a chance to know each other better, but also create a feeling of collaboration. The camaraderie that grows from employees sharing a little fun can go a long way toward fostering a feeling that they’re part of a team.

Chitchat is About Building Relationships

During those inconsequential “idle moments” of office conversations, important information is being exchanged. You’re learning much about others and offering details about yourself.

Whom can you trust? Who possesses strong convictions? Who has a broad experience or in-depth knowledge?
Who is a stimulating brainstormer? Who has the wherewithal for workarounds to problems?
Who can open doors for you? Who can facilitate otherwise hard-to-get connections?
Who can influence the leadership decisions? Who can evangelize your project to the right people? Who can bend the leadership’s ear? Who can be your cheerleader?
Who can lend a consoling ear in moments of problems or crisis? Who sees the bright side of problems?
Who can help you with questions on software, help you decide health insurance plans, or fix the printer?

Casual Conversations are About Networking and Leaving Positive Impressions

Small talk and casual conversations are an important element of collegial workplaces. People like talking about themselves, so if you can remember a nugget of information from the last time you met (kids, pets, and travels are great topics) bring it up.

To be respectful of others’ time, remember this two-minute rule: unless you’re discussing a topic of some importance, try to wrap up your small talk and casual chats in two minutes. Pay attention to your listener’s non-verbal cues and adjust the extent of your conversation. You can always arrange to convene later, “I’d love to hear more, but I’m in a rush. Why don’t I call you afterhours? How about we meet up for coffee this weekend?”

Nevertheless, don’t let chatter go too far and negatively impact your productivity or those of others. If you’re considered as too chatty, others may to resent bumping into you. If you tend to talk too much about yourself, you’ll be judged self-absorbed and interpersonally clueless.

Likeability is Important in How You Will Be Perceived in Your Workplace

Cordiality is a significant persuasive technique because people are much more likely to feel warmly towards those they like. They’ll do things for you if you earnestly show interest in them, chat with them on a regular basis, and make them feel good about themselves.

Colleagues who don’t chat can come across as arrogant or abrupt. Highly competent but unpopular professionals don’t thrive as well as their moderately competent, but popular counterparts.

Small Talk is a Critical Tool for Creating a Personal Bond with Your Coworkers

Even though an office is primarily a place of business, chatting about non-work topics and establishing rapport with coworkers is important. People who know and like each other tend to have each other’s backs and help out when necessary.

Even if, eventually, you’ll be accepted or rejected based on the more tangible aspects of your work, the fact of the matter is that these interpersonal impressions matter a great deal along the way and can even shape how people judge your more actual work.

Idea for Impact: Balance your dedication to your workload with a cooperative nature, you will gain needed allies to get things done and to help your career progression in the company.

Everything in Life Has an Opportunity Cost

August 8, 2017 By Nagesh Belludi 1 Comment

“Opportunity cost is a huge filter in life. If you’ve got two suitors who are really eager to have you and one is way the hell better than the other, you do not have to spend much time with the other. And that’s the way we filter out buying opportunities.”
—Charlie Munger, Investor

Doing One Thing Makes You Sacrifice the Opportunity to Do Something Else of Value

In economics, opportunity cost is the cost of not choosing the next best alternative for your money, time, or some other resource.

One of the foundational principles in economics is affirmed by the popular American aphorism, “There ain’t no such thing as a free lunch.” Resources are scarce. When resources (time, money, mindshare, autonomy, and all that) are scarce, selecting one opportunity necessitates forgoing other opportunities.

Life is all about values and priorities. You face trade-offs. Life requires of you to make choices among mutually exclusive alternatives. Every time you select something, you forfeit other alternatives and the concomitant benefits. The cost of something is what you will give up to get it. This is opportunity cost.

You Can Do Anything but Not Everything … What Will You Sacrifice When You Choose One Option Over the Others?

When mulling over multiple choices, the quality of any option cannot be assessed in isolation from its alternatives. The price you pay (or the sacrifice you make, or the benefits you give up) for doing what you’ve chosen to do instead of doing something else is the opportunity cost.

In sum, an opportunity cost is the cost of passing up the opportunities that a different option would have afforded.

Many costs are calculated in terms of money. However, just because you don’t have to spend money to do something does not imply that the options you face are without their costs. For example, you don’t have to spend money to go for a hike or watch a sunset, but there is an opportunity cost there too. You could have used that time to do something else you value—visiting a friend or reading a book, perhaps.

If you decide to invest two years and some $100,000 getting an MBA at a brand-name business school, there’s an opportunity cost; it costs you lost wages and all the things you could have pursued during that time and with that money. But you anticipate that getting your MBA will pay off by way of a better job in a better company with a better salary.
If you spend your weeklong vacation taking your parents to a beach destination in Florida, there’s the opportunity cost of not going to Paris with your spouse.
If you decide to wake up twenty minutes earlier in the mornings to leave home sooner to work and beat the horrendous traffic, there’s the opportunity cost of twenty minutes of extra snoozing.
When the refrigerator at home breaks down and needs replacement, you will have to give up buying that latest big-screen TV you’ve been coveting.
There’s an opportunity cost to even reading this article at this moment. You could have been watching TV, taking a nap, calling up a friend, or moving on to another article in the time you’re devoting to reading this article.

In a nutshell, even decisions that appear to be no-brainers carry the hidden costs of the options you will decline. Thinking about opportunity costs may not change the decision you make, but it will give you a more rational assessment of the full implications of your decision.

Opportunity Costs Apply to All Your Choices—Big and Small

Opportunity cost is a concept of great magnitude. It is one of those apparently simple concepts in social sciences that are difficult to master and tough to put into consistent practice. Tim Harford, the British author of The Undercover Economist offers a particularly instructive example of appreciating opportunity costs in his Financial Times column:

Consider the following puzzle, a variant of which was set by Paul J Ferraro and Laura O Taylor to economists at a major academic conference back in 2005. Imagine that you have a free ticket (which you cannot resell) to see Radiohead performing. But, by a staggering coincidence, you could also go to see Lady Gaga—there are tickets on sale for £40. You’d be willing to pay £50 to see Lady Gaga on any given night, and her concert is the best alternative to seeing Radiohead. Assume there are no other costs of seeing either gig. What is the opportunity cost of seeing Radiohead? (a) £0, (b) £10, (c) £40 or (d) £50.

…

Answer: Going to see Lady Gaga would cost £40 but you’re willing to pay £50 any time to see her; therefore the net benefit of seeing Gaga is £10. If you use your free Radiohead ticket instead, you’re giving up that benefit, so the opportunity cost of seeing Radiohead is £10.

Charlie Munger’s Wisdom on Opportunity Cost

On the subject of making choices in life based on opportunity costs, Munger stated at a 2010 lecture at Harvard-Westlake preparatory school, “The right way to make decisions in practical life is based on your opportunity cost. When you get married, you have to choose the best spouse you can find that will have you. The rest of life is the same damn way.”
Explaining how Warren Buffett and Berkshire Hathaway use opportunity costs to make investment decisions, Munger detailed stated at the aforementioned Harvard-Westlake lecture, “Berkshire Hathaway is constantly kicking off ideas in about two seconds flat. We know we’ve got opportunity X, which is better than the new opportunity. Why do we want to waste two seconds thinking about the new opportunity? Many of you come from places that don’t do that. You’ve got to have one horse, one rabbit, one something or rather, and that rabbit is going to be thinking about something which would be ruled out immediately by an opportunity cost available generally to the place—but, it’s a different department. You have to be diversified and so on and so on. It’s easy to drift into this idea that opportunities don’t matter, you’ve got so many different ways of doing things that are better. It isn’t better.”
Putting the concept of opportunity cost into operation requires benchmarking any prospective decision to other available alternatives. At the 2006 Berkshire Hathaway annual meeting, Munger advised, “In the real world, you have to find something that you can understand that’s the best you have available. And once you’ve found the best thing, then you measure everything against that because it’s your opportunity cost. That’s the way small sums of money should be invested. And the trick, of course, is getting enough expertise that your opportunity cost—meaning your default option, which is still pretty good—is very high…. Most people aren’t going to find thousands of things that are equally good; they’re going to find a few things where one or two of them are way better than anything else they know. And the right way to think about investing is to act thinking about your best opportunity cost.”

Learn to Evaluate Life Choices Via the Lens of Opportunity Costs—The Stakes Become Clearer

You live in a world of scarcity and must therefore make choices. You cannot avoid regret since there are opportunity costs for every choice you will make.

Everything in life is about opportunity costs. Every time you say “yes” to a choice, you are also saying “no” to everything else you may have accomplished with your time, money, and resources.

Opportunity cost is a commanding tool that you should be wise to apply to all decision-making. If you integrate this concept into your thought process, you will not only make judicious choices, but also better understand the world in which you live.

Idea for Impact: Whether you’re choosing graduate school, mulling over switching careers, starting a business, investing your money, buying a car, or frittering away your evening watching TV, considering the value of forgone alternatives will help you make better choices. Make the lens of opportunity costs the underpinning of your decision-making processes.

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Balance

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The Art of Simple Existence is One of the Most Difficult to Master

Idea for Impact: When One Lives, One Must Live Entirely

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Frugality Over the Ages

Frugality is a Moral Virtue

Idea for Impact: Enjoying a rich life is more important than zealously stewarding one’s savings and investments.

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Mindfulness Simply Means Being Aware and Being Present

Attending to What Happens to Our Minds, Hearts, Attitudes, and Actions

Mindfulness is the Best Antidote to Anxiety

Meditative Mindfulness in the Emerging Context of Consumer Culture

A Few Minutes a Day is All You Need to Reap the Benefits of Mindfulness

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When Employees are Happy, They Work Better

Chitchat is About Building Relationships

Casual Conversations are About Networking and Leaving Positive Impressions

Likeability is Important in How You Will Be Perceived in Your Workplace

Small Talk is a Critical Tool for Creating a Personal Bond with Your Coworkers

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Doing One Thing Makes You Sacrifice the Opportunity to Do Something Else of Value

You Can Do Anything but Not Everything … What Will You Sacrifice When You Choose One Option Over the Others?

Opportunity Costs Apply to All Your Choices—Big and Small

Charlie Munger’s Wisdom on Opportunity Cost

Learn to Evaluate Life Choices Via the Lens of Opportunity Costs—The Stakes Become Clearer

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