Opportunity Cost

Opportunity cost is the cost that you must pay to reap the benefits of whatever you are paying for. For example, You could buy a house and its worth 200,000. However, this house is quite shabby and broken down. The walls need paint, the floors need new hardwood and the windows need to be replaced. You could put in 100,000 worth of all these things, drastically raising the selling price of this house. You may have gotten a $100,000 profit if you sold the house as is but since you spent that instead of recieving it, you've doubled the price tag thus doubling your profit!

Opportunity cost is good because you put some in to get some out. Some people cant grasp this concept so they spend their lives avoiding opportunity costs. In the end, spending a little extra is always better because more then likely, you will increase your overall profit.

In my life the first opportunity cost I will pay is the one attached to a college tuition. Although it seems like a lot of money, once I pay off all my dues, I can make a lot more more then I would with a highschool diploma.