Lecture 02丨Your cost is determined by others

First, negative feelings are not costs.

Second, your costs are determined by others.

1. Negative feelings are not a cost

The first point is that negative feelings do not cost, and many people tend to make this mistake.

Let's say you decide to fix a swimming pool in your backyard, the process of fixing the pool, there are many negative feelings, you have to work hard, sweat, the backyard is dirty for a while and so on, these are not the cost of your swimming pool, because there is nothing to give up.

What is the cost of building a swimming pool? Let's say that with the pool in your backyard, you can't put up a tent on the lot, so that abandoned tent is the cost of fixing your pool.

Let's use a few simple numbers to make this concept a little clearer: if the pool brings you a positive feeling of 100 points, and those negative feelings of dirt and sweat are 70 points, then the net happiness brought to you by the pool is 30 points; while setting up a tent, let's assume it brings you a positive feeling of 50 points and a negative feeling of 10 points, so the net happiness brought to you by the tent is 40 points.

What are you comparing at this point? You're comparing the net happiness of the pool at 30 points to the net happiness of the tent at 40 points. That is, you want to fix a swimming pool, and the price you give up is 40 points of net happiness from the tent, not 70 points of negative feelings from fixing the pool. Likewise, if you were to pitch a tent, it would cost you 30 points of net happiness of the pool that you gave up, not 10 points of the negative feelings you got from pitching the tent.

In short, pools and tents are costs to each other, and we should not see the hard work of fixing the pool or the hard work of pitching the tent as the cost of fixing the pool, or the cost of pitching the tent.

2. Your cost is determined by others

Let's talk about the second point, your cost is determined by others.

Did you know? Our family has an ancestral store on Chang'an Street and our business is selling tea eggs. To this day, I still insist on selling tea eggs from my store on Chang'an Street. My idea is that because the store is owned by our family and we don't have to pay store rent, it costs me zero to continue to operate the tea eggs. Do you think this is the right idea?

It's the wrong idea. Of course, the store is owned by our family and the property rights are ours, so we don't need to pay rent, but we must not forget the concept of cost in economics.

What is the cost? Cost is the biggest price to give up. I insist on using this store to sell tea eggs, the cost is the other possibility that has been given up. If this store is rented to others, I can make a lot of money, so I insist on selling tea eggs, giving up the store rent that can be earned by renting out this store.

Who decides the rent? It is not decided by our family, it is decided by all the other people in the community, it is their opinion that determines how much the rent of this location on Chang'an Street is worth, so it is the other people in the community that determine the cost of my insistence on selling tea eggs. A change in their opinion will affect the cost of selling my tea eggs.

I can own this store, or someone else can own it, and as long as I insist on selling tea eggs here, the cost of selling tea eggs will be determined by other people's opinions of the store.

If someone is willing to pay 20,000 yuan to rent this store, then the cost of insisting on selling tea eggs is 20,000; if someone is willing to pay 30,000, then the cost of insisting on selling tea eggs is 30,000, if it is 40,000, then the cost is 40,000. It has nothing to do with whose house this is. The cost of insisting on selling tea eggs has to do with only one thing, and that is the biggest income opportunity given up.

3. the scope of your career is determined by society

How a person's life is spent and put to use for which purpose is determined by the rest of society together.

Your choice of career is largely influenced by how others view various careers. If you can become a good programmer, but you have to read "Dream of the Red Chamber" and make the study of "Dream of the Red Chamber" your lifelong career, then the biggest price you give up is your income as a programmer, can you carry it? You may not be able to carry it.

We spend a lot of time when we are young studying different courses and participating in different social practices, the purpose is to figure out, which career can bring the most benefit to them, and can best meet their interests, while the cost they spend is the lowest.

You may think that you can choose a wide range of careers, but think about the careers that you could choose 50 years ago, or 100 years ago.

In fact, the careers you can choose today are only a very narrow range, which is recognized by most people today and exists. You choose the position that interests you the most, costs you the least, and gives you the greatest total return over a significant period.

So the economic view is that you own your life, but how you spend it and how you choose your career is largely determined by the rest of society.