opportunity cost: a little thing Erik taught me to help make better decisions

do this, not that
shannon silver & erik schuchard talk opportunity cost on essellesse, a lazy luxury san francisco lifestyle blog

hi hey hello konnichiwa!

Today I want to talk about something Erik & I have been talking a LOT of over the past few weeks – especially while on vacation.

OPPORTUNITY COST

First things first about Erik, he works in finance and is very analytical. He is very much wired to think of things with economic principals in mind. If we are being completely honest, it’s a huge weakness of mine & not my strongest suit. One thing I really love about being so connected with Erik is that everything I lack, he has & vice versa.

Every single night, he never ceases to fascinate me with our conversations. I am truly lucky to be able to have dinner with him every single night for this alone. Our dinner conversations so incredibly interesting because he helps me think of myself & everything I’m doing in a whole different way. I mentioned a bit on his personality type here but I love talking business and future with him since he’s so reasonable, analytical, & fixated on improvement. ((& i just hope he loves my conversations on food science, cooking, flavour balance, wine pairings, patrick bateman-esque musings on music & creative endeavors as much as I love his on the nitty gritty of business))

Ever since moving in together over a year ago {quick thoughts on it in this post!!}, it’s one thing that has helped me develop professionally in a way I never knew possible. I’m not even being hyperbolic but I’ve learned more about economics, business, & finance since living with Erik than I ever have in college {which in that same post, I do share my controversial views on college}. And it has been a gamechanger to how I view my work, my craft, my personal life, events, collabs…. everything, just name it.

So today I want to talk Opportunity Cost

basically:

if we want to put it in a formula:

Opportunity cost = Return on Foregone Option – Return on Chosen Option

With every choice you make, you are sacrificing another so you want to make sure you get the biggest return on what you choose.

For example: an hour of mindless scrolling on instagram vs an hour of crafting a unique blog post. Which is the more valuable option?

That one may seem obvious but there are some that aren’t that obvious.

For example: I was radio silent on my blog & instagram this summer, but I was very active somewhere else… Pinterest! I noticed I have a lot of traffic there, so I decided to water it. To focus on it completely, I had to put the other outlets at bay. Energy can only be transferred, remember? Also, I didn’t want the distractions. I didn’t want to see what anyone is doing on Instagram to influence what I was doing on Pinterest. I need to fiercely protect that energy.

Now? I am VERY happy with how my Pinterest looks -it’s extremely organized and a valuable source for visitors to get aesthetic inspiration, whether they are looking to up their instagram game or get inspo on looks or how to pose. Not to mention, numbers wise, it all paid off as I am up 30k more monthly impressions than I was 3 months ago & growing.

For a more financial example: we were recently invited to a trip that would of cost us not only a lot out of pocket, but a lot in time, a lot away from work, as well as some other personal aspects. We were very much on the fence with things but then Erik started saying some specifics in a “Would You Rather” form.

Would you rather do this trip for 3 days or 2 weeks at the Santa Barbara Ritz Carlton? Would you rather do this trip of leisure or a full productive week home of work? sometimes work > play & that’s totally okay. Some of them got pretty outrageous ( ie would you rather this or 10 dinners at the French Laundry & the first example)… and it was clear where we stood and where the biggest return was.

In fact, the more outrageous the examples get, the more obvious your answer will be. Sometimes when Erik is making a point on something I should absolutely not choose, he will bring up very ludicrous, but legit options and it makes it as clear as day what choice I should make.

There’s a reason why Eat This, Not That is such a successful healthy living book – it basically lays out the opportunity cost in an easy to grasp way.

golden gate brige via san francisco lifestlye blog essellesse

So if you are struggling on a decision to make, weigh out your options and see what’s the best return.

Think of what are the results of Option A & what are the results of Option B and whichever is the most valuable – choose that.

I’m more decisive than ever these days, & I find my choices have gotten better & smarter. Not to mention, it’s made it easier for me to say NO to things…. but that, my friends, is a post for another day.

Give it a go…. & don’t be afraid to get a little crazy with the this or that. The crazier, the better – it will really help clarify things.

How about you? Any tips on making more valuable decisions? I’d LOVE to hear {these kind of topics are my fav!!!!}

OH! before we go, Erik wanted to chime in with his thoughts. I copied & pasted it completely:

Hey it’s Erik with a few thoughts.  (1) appreciate the complimentary words from SLS here, it’s nice to have your single biggest fan as your life partner (2) I’m a ruthless optimizer and I work hard to address my cognitive (usually emotional) biases and (3) SLS will share my “10 rules to live by” at some point – key is (x) I place a high value on time because it’s the only thing that one can never get back and (y) I try to be mindful about consumption for reasons of mindfulness and environmental footprint more than economics.  

The “eat this not that” framework is really fascinating to me.  SLS gave some great examples of using this in a particular case in absurdium – but we each only have a certain amount of free time, $ in our budget, # of calories to eat per day, space in our house, etc – let’s make them the best we can.  

A topic for another day but all societal incentives are to pressure us to do more and buy more goods and services {<<hi it’s me shannon chiming in: be very wary on who you are following on social media and make sure they EMPOWER you & not just SELL you. there is a huge difference and whatever you watch on instagram will influence your thoughts… it’s what makes influencers influencers}.  As the examples above show, sometimes saying “no” is fine but society will try to guilt / shame / fomo you into doing things that just aren’t a good use of your financial and temporal resources.  There’s so much power in breaking out of that feedback loop.  Think of this as you try to live a more mindful and meaningful life.   

🌊
🐉
🔥

Happy almost Friday! <3

x SLS

IN CASE YOU MISSED IT

33 thoughts on turning 33

SLS Book Club: 4 books that have helped me with my business

offline – where the magic happens

what’s your love language? here’s mine

my favourite personality test: the enneagram test & my results

another tip from erik that literally changed my life

{ ps – we were parked in the title image – tbh, we were waiting on some fast food & parked by the window! }

about essellesse

essellesse is a lazy luxury lifestyle platform by Shannon Silver focusing on everything that’s important to living your best life – great food, wine, travel, vintage style, fitness and skincare. essellesse evokes a style of lazy luxury that’s fun, intimate, and easy breezy.

@_shannonsilver on instagram