Weighing The Opportunity Cost of Your Financial Decisions
In This Episode:
A well-known radio show host who teaches personal finance does not believe in opportunity cost. In fact, he advocates putting your extra cash towards paying down your debts. While there’s nothing wrong with getting out of debt, what most fail to realize is that the way you spend your money matters. When you spend cash, you give up the ability to earn interest on the money you could have invested.
In today’s episode, Jim Oliver and Nick Kosko talk about the real cost of the money you spend. What is the trade-off when you let go of your cash? It’s important to weigh the opportunity cost of your decisions. To do that, you can use the EVA or Economic Value Added) method which was developed by management consulting firm Stern Stewart in the 1990s. Big corporations like Coca-Cola, GE, and many others use EVA to measure true financial performance.
Now, what do you think will happen when you use EVA to measure your wealth creation performance and IBC as your personal banking system? Listen to this episode to discover how to use these financial tools effectively to grow your wealth and leave a legacy for multiple generations.
Read the article – The Real Key to Creating Wealth.
Books Mentioned in the Episode:
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