Short video (YouTube) by Jayson Lowe explaining opportunity cost in personal finance: money spent on purchases permanently forgoes the opportunity to earn interest, and 'becoming your own banker' is presented as a way to retain and grow that financial value while still funding everyday and large purchases.
So when I refer to lost opportunity cost, what specifically does that mean? I'll give you a simple example. When you purchase your groceries and the transaction processes, you achieved your objective of buying the food and someone else got your money. Now, from that point forward, you've permanently given up the opportunity to earn interest on that money that you spent on the food you spent, you achieved the objective, but someone else got the money and someone else gained the opportunity to earn interest on that money. And so when you take control of that function by becoming your own banker, you have a growing pool of financial value where you're never foregoing the opportunity to earn interest on. Yet you're still able to achieve all of those things that you need. Whether it's day to day basics or more larger ticket things like investments, business equipment, vehicles, weddings, education, you name it. Anything that you would otherwise pay cash for lease or finance, the money must come from somewhere. And so if you're presently earning income, spending all that money, you're doing all the work and everyone else is getting all your money, it doesn't have to be that way. The process of becoming your own banker solves that problem.
