Are you tracking the true costs of your projects? I recently had a discussion with a good friend of mine regarding the cost of my new book, “The Project Manager”. I had calculated how may books I needed to sell to recoup my original investment. He laughed at me when I told him my estimate and informed me that he thought I was significantly under estimating my cost. I described to him how I had calculated my estimate and he asked me, “What about your time?” I hadn’t included the most precious resource, time.
What about time?
This is a question I always highlight to others, but didn’t apply when it came to my own writing. I informed my friend that it was just my free time and I would probably be watching television or doing some other unproductive activity instead. He reminded me that there is always an opportunity cost.
Time is our most precious resource and once used, we can never regain it. How we chose to spend our time is up to each of us. We all have busy days with work, family, social organizations, staying fit, and a myriad of other activities. Sometimes we need to rest and recharge our batteries.
Opportunity cost is the loss of the alternatives when one alternative is chosen.
My friend explained that he hates doing work in the yard and that whenever he has moved to a new house, one of the first things he does is hire someone to mow the grass and trim the trees. He explained that instead he could be doing something he really enjoys, like taking his kids out for ice cream or watching football.
There are many demands in our lives and it is important to consider the opportunity cost of the decisions we make. I recalculated the cost of my book with the cost of my time (based using my hourly work salary); it was over twelve times my original cost estimate! My book is a labor of love that I hope will benefit others. I would certainly make the same decision again knowing the opportunity cost. I am not sure I would make all the same decisions in my life knowing the opportunity cost. Every day we have a variety of options regarding how to spend our time, based on our priorities. Think about all your options, before committing your most valuable resource, your time.
The discussion with my friend highlighted two key points:
- The first, is that I need to apply the same project management principles and concepts to my own life, that I write and speak about.
- The second, is that I need to make some new friends who aren’t certified Project Management Professionals (PMPs). Just joking, I love my PMP friends.
As you make decisions in your life, keep in mind that your choices limit your opportunities; choose wisely.