Life is about choices. How we conclude what the “right” choice, or the best option is, can be determine by employing one fundamental economic principle. Cost-Benefit Analysis is defined as “weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option.”
Simple – weigh the pros and cons of each possible decision to determine which will give you the greatest benefits and the fewest costs. Well, maybe not THAT simple… we all know making choices is easier said than done. But being able to recognize when the costs are outweighing the benefits (and when benefits are optimal) is an extremely important personality trait and is a good indicator that one will be successful in achieving his goals.
It is worthwhile to revisit my post about finding a balance between being personally responsible for your life and being open to and recognizing opportunities as they arise. The Cost-Benefit Analysis could easily be applied to my Shit or Get Off the Pot lecture as well. Being able to use your time wisely – effectively AND efficiently – is the absolute root to success. After all, time is the most scarce resource we humans have.
What do YOU think about my theory, and how have you applied the Cost-Benefit Analysis or other principles to your life?
postscript: I just linked to a whole bunch of mind-fuel awesomeness, so take a few minutes to read the articles… the benefits will MUCH outweigh the costs. ;)