Our Recent Posts

Archive

Tags

Opportunity Cost (Again)


If you live in a mortgage free house that you own and it’s worth $600,000, then in addition to rates, insurance and maintenance it’s COSTING you about $800 PER WEEK to live in your own home.

This is the “opportunity cost” of owning the asset – what you are losing by not putting that asset to work for you by earning you money.

If you consistently have “substantial” amounts in your cheque account, the bank may be generous enough to charge a nil account keeping fee but it is still costing you money to keep it there instead of putting that money to work.