The Shocking Penalties of Opportunity Cost


Good is the enemy of great. Sa tagalog, “Pwede na” ang kalaban ng “siksik, liglig at umaapaw.”

Hi everyone, J3 here from Pinoy Money Academy and in this article, we will talk about “The SHOCKING Penalties of Opportunity Cost”. I’m very excited for what you’re about to learn so let’s get right into it!

What is Opportunity Cost?

It is the cost of choosing one option over another.

Halimbawa, may dalawa kang manliligaw. Si Gentleman A at si Gentleman B. Pareho naman silang pasok sa criteria mo, pareho naman silang napapakilig ka at minamahal ka ng tunay. Pareho naman silang ‘okay na, pwede na’. Ngayon kailangan mo na pumili. Sino ang sasagutin mo?

  • If you choose Gentleman A, the opportunity cost is Gentleman B.
  • At kapag sinagot mo naman si B, hindi mo na pwedeng piliin si A.

 “Opportunity cost is also the opportunity lost as a result of your choices.”

So why is opportunity cost so important? And what is so shocking about it?

Well, we will now talk about the 2 “C” qualities of opportunity cost. And it is from these two qualities that opportunity cost can become shockingly expensive.

C#1 – Opportunity cost is CONCEALED. 

Actually may plot twist kasi ang kwento. Habang pumipili ka between Gentleman A and B, may hindi ka pa na m-meet na si Gentleman C. At once ma-meet mo siya, siya pala yung talagang perfect for you, no questions asked na, siya na talaga.

Now, since pumili ka na between A and B, opportunity cost mo na rin si Gentleman C. Kahit ma-meet mo pa siya, hindi siya magkakainterest sa iyo kasi taken ka na, at Gentleman nga siya. Sana nalang, happy ka na talaga sa pinili mo. Opportunity cost is often CONCEALED. While we think we’re just making a choice between A or B, we’re also unknowingly not choosing choices C, D, E, F and G. Now, let’s apply this concept to money.

Let’s say you got a bonus of P40,000, and you’re now deciding what phone to buy.
Samsung ba or iPhone? A or B?

The moment you choose A or B, you also don’t choose the hidden alternatives such as:

  • Travel abroad somewhere in southeast Asia for a week.
  • Travel to 4 different local destinations.
  • Learn a skill you’ve always wanted to learn like playing the piano, or perhaps break-dancing,
    or maybe learning a new language. 
  • Invest it! If you invested the P40,000 and it earns 12% per year, at the end of 10 years, you would have about P120,000. That could already be used to start up a small business. Or just leave it another 20 years, and it becomes a million pesos.
  • Donate it, and sponsor a child’s life for a full year.

What’s my point here? I’m not saying that there is only one right answer.

Na dapat invest or save nalang. Hindi naman ganun. After all, money is just a tool to help us get what we want out of life. So ang tanong ko lang is, yung binibili mo ba,yan ba talaga ang gusto mo sa buhay? Is it what you really want?

If you are about to buy something you want, ask yourself, “Is there something I want much MORE than this?”
Doing this every time will ensure that you’re really making the most out of your own money.

With that, let’s go to the 2nd Quality. Because opportunity cost is often concealed, meaning hindi nga natin siya napapansin, so we make the same decisions over and over again. Making opportunity cost “Compounding.” This is where opportunity cost becomes shocking.

C#2 – Opportunity Cost is Compounding

Let me ask you, which would you rather have for FREE?

  •  2 FREE Cute Puppies OR
  •  FREE College Education in the Top Universities of the Country (good for 4 years)

If you’re a parent or plan to be one, then most probably you’ll be saying, “J3 malamang yung libreng college education! Ang mahal kaya ng tuition!”

But here’s the shocking part, in the real world many people are choosing the 2 cute puppies, instead of the college education. And they don’t know, they have no idea they made that choice. Let me show you how that happens…

Let’s the neighbor’s dogs had puppies. So they are giving them away for free. You take two puppies, para may kalaro naman. Of course you promise to take good care of the puppies. And of course you would really take care of them because they’re so cute. Ang sarap panggigilan! And you got them for free! Yehey!

Now comes the responsibility.

  • Dadalhin mo sa vet, para mapabakuna.  Anti-rabbies, heart deworming.
  • Baby dog food. Nag tae yung puppy, dalhin ulit sa VET, you’ll buy special dog food, yung pampalasa, vitamins pang pataas ng appetite.
  • Madami nang kuto si doggy, so ipapagroom, bibili ka ng special spray para sa garapata.

The dogs are healthy and of course you love them so you keep on taking care of them. All in all, having a dog can cost you about P10,000 per year (about P883/month) for its food, vitamins, medical care, training, toys. (Some people spend more, some spend less). If you’re a pet owner, think about how much money you’ve really spent on your dog. You’ll be surprised that it’s a lot more than what you expected. Natural lang hindi natin ito mapansin dahil ang gastusin na ito ay natatago ng pagkacute ni doggy.

Anyway back to the story, so we have 2 dogs. Each having a financial responsibility of P10,000 per year. Since we have two dogs, that’s times two. We unknowingly accepted a financial responsibility of P20,000 per year, for the next 10 years. 10 years kasi yan ang typical lifespan ng asong naaalagaan ng mabuti.

So… what is the opportunity cost of spending P20,000 per year?

If instead you invested P20,000 per year, for 10 straight years, and it earned 12% per year.
How much money would you have?

  • At the end of 10 years, you would have about P680,000.
  • At the end of 15 years, you would have P2.1Million Pesos.
    (This is the estimated cost of college 15 years from now due to inflation.)
  • At the end of 20 years, you would have P6.5Million Pesos.

Let me paint you a horrible scenario that I really wish happens to no one.

In the future, you ask yourself, why can’t  I send my children to the university they want to go to? Yung sagot: Kasi yung kapit bahay namigay ng libreng tuta. At tumanggap kami ng dalawa.

Boom. Ang sakit diba?

Just a few clarifications…

Just a little clarification before we end. I have nothing against dogs, you know, I love them. Please don’t focus on the dogs. The dogs simply represent things in your life that you also love, and have gotten used to, but it is very possible it’s holding you back from your bigger dreams and goals.

The dogs could be a barkada tradition like eating out or watching movies regularly. Or perhaps a hobby or playing a specific sport, or competing in leagues. It could also be a certain lifestyle you’ve been used to living when it comes to fashion and accessories. The puppies represent your comfort zone, things you have gotten so used to doing, that you are very attached to it, and are already somehow a part of who you are.

“The challenge now is are you willing to let it go for something greater?”

Again, in our example, it doesn’t have to be the college education. That just represents your deepest, biggest and most meaningful dreams and goals. What are the things you truly and deeply desire?

  • Is it to travel around the world starting with Japan, then Greece, then Rome, then France then Italy and so on?
  • Is it to put up your own farming business in the province and retire there?
  • Is it to live in a modern style house with a swimming pool and a huge garden?
  • Is it to study again? To take a post-graduate course in an Ivy League School?

Whatever it is. DO IT! And do not let the little cute “puppies” distract you from your dreams. Remain focused on your goals, and surely you will be able to achieve them. Right now, I know you have somehow identified your “puppies”, and you also know what you truly want to do. But you’re hesitant to change, to make the sacrifice. I get it, and that’s totally natural. So as we end this video, let me share with you a new beautiful definition of sacrifice. It goes like this:

“Sacrifice is letting go of what is good, in exchange for something greater.”

Right now, I’m sure you’re living the good life. But are you willing to let it go for the great life?

Thank you very much for reading and I hope you learned a lot from this article.
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Then if you want to learn more about money, and how to make smarter decisions in life, I have a FREE online seminar series for you. It’s called the 5 Pillars of Wealth and it talks about the 5 most essential concepts needed for anyone to become wealthy. To claim this Free Gift, just head to the homepage of this website ( and register there. See you in the next training videos!

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