It's no secret that I completed my education with the culmination of my MBA as a much older student. Do I wish that I would have finished school much earlier? Of course! It is what it is. Through the course of my studies I learned a few things about business. However, what I was also able to do is incorporate some of those business fundamentals in my life. There a three in particular that I think maybe helpful to others. Maybe this will help in the New Year.
1. Cost Benefit Analysis
To be fair the concept is more complicated in terms of its application to business, projects, investments, etc. However the basic idea can be applied in all aspects of life. The idea is that if something costs you more than you benefit you should walk away from whatever that something is. Costs could be money, time, emotion, property, or anything that you value. For example if you want to start a house project a simple cost benefit analysis can be applied to decide, from an objective point of view, if it's worth it. You can also apply this to your relationships. If at the end of the day it costs you more to be in a relationship, than you benefit, why continue to sustain it? Of course this is an oversimplification, but sometimes decisions can be that simple when you look at it through an objective lens.
To be fair the concept is more complicated in terms of its application to business, projects, investments, etc. However the basic idea can be applied in all aspects of life. The idea is that if something costs you more than you benefit you should walk away from whatever that something is. Costs could be money, time, emotion, property, or anything that you value. For example if you want to start a house project a simple cost benefit analysis can be applied to decide, from an objective point of view, if it's worth it. You can also apply this to your relationships. If at the end of the day it costs you more to be in a relationship, than you benefit, why continue to sustain it? Of course this is an oversimplification, but sometimes decisions can be that simple when you look at it through an objective lens.
2. Law of diminishing returns
By definition it means: The tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of result has been achieved.
Through this perspective it would not make sense to continue to put effort into something that has stopped giving you or will never give you the return you're looking for. I don't discount human emotion. As a matter a fact it's the main driver as to why things can't be viewed objectively and decided on objectively. There is always that human subjective lens. But the idea makes sense. If something or someone has reached that point of diminishing returns your resources are better suited for something else.
3. The common denominator
By definition it means:
Do you know those friends or family that always have drama or chaos in their lives? Year over year they are the same stories, same circumstances, same outcomes? Well here is a piece of advice for those folks. If they are the common denominator in all those situations, they need to stop asking why. They are the issue! Change starts within and then the rest will follow.
By definition it means: The tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of result has been achieved.
Through this perspective it would not make sense to continue to put effort into something that has stopped giving you or will never give you the return you're looking for. I don't discount human emotion. As a matter a fact it's the main driver as to why things can't be viewed objectively and decided on objectively. There is always that human subjective lens. But the idea makes sense. If something or someone has reached that point of diminishing returns your resources are better suited for something else.
3. The common denominator
By definition it means:
1. Mathematics A quantity into which all the denominators of a set of fractions may be divided without a remainder.
2. A commonly shared theme or trait.
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So with that I'm throwing up deuces and I'm out!
Happy New Years to whoever reads my ramblings. Looking forward to 2014!
