But it’s FREE….(No it isn’t).
I recently received a phone call from a google adwords ‘expert’ who excitedly informed me that her team had performed a ‘health-check’ of my website, and boy was it my lucky day because their company were offering me a “FREE” consultation.
Struggling to withhold her excitement she asked me when she could book me in.
I was extremely grateful for her offer, however was driving at the time, and asked if she could email me some further information and I could confirm a day and time with her once I’d had a chance to assess whether this was of interest.
“But can’t you just book in a time, we will fill up!” she snapped very puzzled at my response.
“Unfortunately not sorry. But I’m very appreciative of your offer so I’ll explore it further,” I replied.
“But it’s FREE. It doesn’t cost you anything…We are doing it for FREE.”
And there it was…
How dare someone question whether they want to accept this gift when they are not paying a cent for the privilege.
By now she had become quite agitated.
“If you don’t want it you can just say so,” she snapped again.
As this continued it dawned on me why she was so annoyed. We have very different understandings of what is free, as we have likely have a fundamentally different understanding of the concept of opportunity costs.
There are many definitions of opportunity costs, but this version from Gregory Mankiw’s Principles of Microeconomics really resonates with me.
“The opportunity cost of an action is what you must give up when you make that choice.
Another way to say this is: it is the value of the next best opportunity.
Opportunity cost is a direct implication of scarcity. People have to choose between different alternatives when deciding how to spend their money and their time.”
Or as Nobel Prize winner Milton Friedman would put it “there is no such thing as a free lunch.”
In her mind what she was offering would cost me nothing, but in my mind it would cost me the only asset I can never buy back — time — which is why I’m constantly becoming more careful about how I spend it and what I spend it on.
It’s such a simple concept, but in a capitalist society the value we place on time appears to have become a blind spot for many of us. We rationalise rounding up to the hour, rounding out the day, conforming to neat time-blocks as time often feels so infinite, and generally only becomes more of a concern when we believe it is costing us money.
However, we constantly see people’s lives changed when they are faced with tragic circumstances and are faced with a scarcity of time and how quickly this asset gains value.
Sudden illness, forced relocation, even holiday romance, are all examples where this notion of opportunity cost is so apparent, and yet often this recognition of time is left too late.
Similarly, opportunity cost applies to those jobs, tasks, businesses we agree to invest in. There’s always a trade-off which is why I’m resolved to say No to more things, because deep down I know that when I say Yes I am someone who will throw everything I have into making those things a success.
So now the critical question comes…as we approach the beginning of 2018 how do you choose what you are going to invest in?
We’ve all seen or at least heard of that person who is incredibly good with money. They analyse, they forecast, they scrimp, they save and they do it better than anyone else because they do the planning up front so that when opportunities present themselves they know what they have to spend and are positioned to make that decision with confidence.
This process is no different.
We need to do the planning up front and this requires real soul-searching, and understanding how we are going to spend our time focusing on those things that really matter. Matter for us. Matter for others. Matter because we believe in something and we’re committed to building something incredibly special.
We do this, because once we know the impact we could have if we focused our energy and we know there’s no way we’re going to trade that time away unless it’s for something equally as important.
Once we do this, it doesn’t matter if it’s ‘free’, it doesn’t matter if it’s quick and it definitely doesn’t matter if it’s easy — we simply start to condition ourselves to ask two simple questions when the next shiny thing comes along — is it really worth it, and what will it really cost?