Opportunity Costs & The Butterfly Effect
Opportunity cost is one of those fun concepts many people never think about. Unfortunately, it’s also one of the biggest things that unknowingly steals from us. But before we jump in, let’s define what it is.
“The loss of potential gain from other alternatives when one alternative is chosen.”
This is the dictionary definition of opportunity cost.
It can come in many forms, what you choose to do with your time, your money, and your attention. An easy example is that because you’re reading this post right now, you cannot simultaneously be climbing Mount Everest. You made a choice with your time to read this instead of doing something else. Was this the best use of your precious time? That’s what opportunity cost is.
Why I Love Opportunity Cost
I think opportunity cost is a great exercise in figuring out what you truly care about. A few months back, when we talked about value, you may remember that opportunity cost was one of the four components of my value equation. If your values are clear, then you already know what, where, when, and how you should be using your time, attention, and money.
I also think opportunity cost is closely tied to the idea of the butterfly effect. If you haven’t seen the 2004 movie The Butterfly Effect, it might be worth a watch.
The reason these two ideas feel connected is because one small decision can create massive ripple effects later in life. In the movie, small changes lead to drastically different outcomes. While we probably won’t experience what Ashton Kutcher does in the film, the reality remains: our choices today shape the life we live 5, 10, or 15 years from now.
I like to imagine it as a fork in the road with multiple paths. You can only pick one. Essentially, I’m trying to gather as much evidence as possible to choose the best path for me.
If you take the right “road” in this metaphor multiple times in a row, you’ll eventually end up in a place you never thought was possible. But only you know what the right decision is—because again, it all comes down to what you value.
A Real Example: Geckos vs. Bitcoin
On Black Friday 2022, I was sitting at home waiting to see what crested geckos would become available. Every year, I made large gecko purchases on this day to bring in new bloodlines and pick up geckos I could raise and resell the following year.
That year, I was only looking for one specific morph. I wanted to find it for $7,000 or less. But I had a decision to make: buy the gecko—or buy Bitcoin. At the time, Bitcoin was about $16,500.
I did end up finding the gecko I wanted, a juvenile male, 100% het axanthic lilly white crested gecko. If that sounds like gibberish, just know it was a rare and expensive morph.
Now I had a choice: buy the gecko for $6,300 or put that money into Bitcoin?
When I ran the numbers, the gecko looked like the better purchase at the time. A similar adult gecko had recently sold for $15,000. I figured I could raise him, breed him, sell the babies for a profit, and maybe even resell the adult down the line for a gain if I wanted to.
This wasn’t a random gamble for me, I’d been doing this for years. Raising, breeding, and selling geckos was something I knew well.
The Outcome
So, did I make the right decision?
Hell no.
I bought the gecko in November 2022. What I didn’t account for was the flood of crested geckos from South Korean breeders in early 2023. The market crashed. Thankfully, I only had two high-value geckos at the time. Some people lost tens of thousands of dollars between 2023 and 2024.
To make matters worse, my gecko—once he reached maturity—wasn’t even interested in breeding. No babies. No sales. No return on investment. This year at least.
In 2024, when I finally shut down my gecko business and sold off everything, I ended up getting just $2,050 for that gecko. That’s over a $4,000 loss, not including all the time and effort it took to care for him.
Had I bought Bitcoin that same day and held it, I would’ve had $25,833 when I closed the business, and $41,496 as of the day I’m writing this post.
That’s opportunity cost in action. I chose wrong, and the difference was about $40,000.
Now combine that idea with the butterfly effect. What could that extra $40,000 have meant for my life today? A better car? Earlier FIRE? Maybe. Maybe not. But multiply decisions like this across hundreds of daily choices, and it’s wild how much they could ripple across your future.
Everyday Opportunity Costs
Opportunity cost doesn’t just apply to big things like gecko investments. It’s in the small, everyday stuff too.
Take your daily coffee. Maybe it’s $5. No big deal. But over time? That adds up. The real question is: What are you giving up in exchange for that coffee?
If coffee brings you joy and energy and helps you tackle your day, then maybe that $5 is exactly what you should be spending. That’s why knowing what you value is so important.
I apply the same thinking to cars—my favorite indulgence. The costs are much higher than coffee, but it’s something I truly enjoy. As long as I’m still achieving my financial goals, I don’t see it as wasteful. But if it starts to interfere with those goals? Then it becomes a problem.
Final Thoughts
Thinking critically about how you spend your money, time, and attention is one of the best ways to figure out what you really value. Over time, you’ll see clear patterns in what matters to you—because that’s where your resources go.
I try to remind myself daily that everything has a cost, whether in time, money, or attention. So I try to spend each of those three wisely. If you can do that, anything is possible.