Economic value is the value of a good or service, taking into account the opportunity costs of that good or service.
Opportunity costs are trade-offs: essentially, all the options you’re giving up by choosing the option you did. When people want to “keep their options open,” it means they’re afraid of committing to one option, because that closes the door to all the others.
Economic value takes into account market value (how much something costs), but it goes beyond that. Market value says to you, “That chocolate bar costs $3” while economic value says “That chocolate bar costs $3, plus more fat on your bod, plus a shot of serotonin and endorphins, plus three fewer dollars you could be spending on something else...like saving up for some headphones, or buying even better chocolate.”
No wonder economics is the dismal science...it makes you start regretting your choice even before you made it. But looking at all your options before you commit is rational, right?
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Finance: What is a Hard Asset?12 Views
Finance allah shmoop What is Ah hard asset Yeah It
takes a lot of hard work to get an asset
like that Okay So hard asset is just one that
you can bang on touch Engage with cell Alright examples
Oil it's Hard asset gold Hard of vintage nineteen Fifty
seven Ferrari with beige leather interior hard four thousand head
of longhorn cattle in texas A commercial building in the
best part of town All of these arm or less
commodities Hard assets Well okay Okay The categories Rare cars
art coins stamps stuff like that that's where they fit
So what do you care if something is ah hard
asset or a soft one Well most or all hard
assets are commodities and they generally do very well in
periods of very high inflation when you know stocks were
getting crushed And yeah the feds raising rates appoint a
quarter now forever Well equities and bonds will get crushed
Commodities well generally keep up with the spike in prices
causing the fed raised rates in the first place So
they're a good hedge for most investment portfolios And not
all of them are great forever like check out riel
Inflation adjusted oil prices the last few decades you had
not a good run Most not all do well though
an oil will likely have its day in the sun
again At some point you lan When in doubt remember
what kim kardashian and warren buffett said A good asset
is hard to find and a hard asset is good
to find But we won't tell you who said which
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What is opportunity cost? In short, it's the eventual monetary cost of choosing to do one thing over another (often choosing travel or experiences...