Economic Wisdom to Apply in Your Twenties

Chapter 6 Prologue
Prologue Section 5 A small step today is a giant leap tomorrow
Eagles are said to be the longest-lived birds in the world.It can live up to 70 years in its lifetime.But to live such a long life, it must make very difficult choices at the age of 40.

In it's 40th year its long and flexible talons can no longer grab prey which serves as food.Its beak became so long and curved that it almost touched its chest.It's old-‐ aged and heavy wings, due to their thick feathers, struggled to fly.

At this point it has only two choices: wait to die or go through a painful renewal process to be regenerated.The process that the eagle needs to go through to regenerate is: during the 150 days of long practice, it must work hard to fly to the top of the mountain, build a nest on the cliff, and stay there without flying.The eagle knocks its beak against a rock until it falls out.Then quietly wait for the new beak to grow.It uses its newly grown beak to pull out its nails one by one.When the new nails grow back, use the new nails to pluck the feathers one by one. After 5 months, the new feathers grow back, the eagle starts to fly, and can live for another 30 years!
The eagle's rebirth process is what it must experience in its life.If it does not go through this difficult selection process, it will face an untimely death.

We all know that we face many choices every day in real life, and we certainly hope to make the most reasonable decisions in the choices.In the eyes of economists, all choices must take into account the costs and benefits of alternatives.In many cases, the cost of an action may not be as obvious as it first appears.For example, when you are faced with whether to work or continue to study, if you choose to continue to study, the cost you have to pay will not only be the sum of money for tuition, books, housing and food, but also if you choose Job, monthly salary and possible future achievements in this job.

Opportunity cost is an important term in economics, which is what you have to give up to get something.That is, the forgone benefit of using a resource for a specific purpose without using it for other alternative best uses.Opportunity cost is the cost incurred due to choice behavior, also known as choice cost.

The concept of opportunity cost begins with the scarcity of resources.In this world, the scarcity of resources is an undeniable fact. Any kind of resource is limited, and limited resources can be used in many ways.Putting resources to one use forgoes other options at the same time.Economics assumes that people, under the guidance of rationality, allocate limited resources optimally to maximize utility.

Bill Gates entered the Harvard Law Department in 1973. He chose to drop out in his third year and founded a computer company with his companions. On March 1999, 3, Bill Gates was invited back to his alma mater Harvard University to participate in a fund-raising meeting. When the reporter asked him if he would like to continue his studies to get a diploma from Harvard University, he smiled and did not answer.

Bill Gates once told his college teachers to be a millionaire by the age of 30 and by the time he was 31 he was already a billionaire. In 1999, "Forbes" selected Bill Gates as the first billionaire in the world, with a net worth of 850 billion US dollars.If the opportunity cost analysis of economics is used, the opportunity cost of Bill Gates getting a Harvard University diploma may be the richest man in the world, so it is not surprising that he chose to drop out of Harvard.

For us in our twenties, youth is the greatest capital and the scarcest resource.After all, time is gone forever, and youth is only once for everyone.Therefore, in this once-only time, we should remain rational in the face of every choice, analyze the reality and the future with an economic perspective, and consider the opportunity cost of each choice. This is a small step for today. , to take a big step towards tomorrow!

(End of this chapter)