Fixed costs, variable costs, capital costs, depreciation all factor into the price tag we pay at the checkout line.
But what about the…
Opportunity cost–the loss of a potential gain. If I spent $30,000 on a brand new car, what could have I earned by buying a $3,000 used car and investing the other $27,000 in index funds?
Environmental cost–the impact of our finite resources. Is it green and clean? What kind of strain are we putting on the world we live in by using this product?
Cultural cost–the influence this has on how we live. Does this product promote dignity, opportunity and respect? Does it help us build a culture that we can all be proud of?
The most important principle to understand is this:
Sunk cost–the price paid that can’t be recovered…