This discussion revolves around the trade-off theory of money, time, and location in life. Whenever we undertake an activity, we are always choosing one thing over another. When we decide to pursue an activity, we inherently reject countless other possible actions. Economically, this is referred to as “opportunity cost.”

Opportunity cost, a fundamental concept in economics, refers to the potential benefits an individual, investor, or business might miss out on when choosing one alternative over another. But it’s not confined to business contexts. It applies to all areas of life. For example, if we decide to sleep in instead of exercising, there is an opportunity cost involved. Likewise, if we spend more time at work instead of with our kids, there is an opportunity cost to that too.

There are countless such scenarios we encounter daily. When we choose to pursue one activity, we do so at the expense of another. However, why we prefer one activity over another can depend on numerous factors, including individual circumstances, preferences, opportunities, resources, motivations, experiences, stages in life, energy levels, and health.

For some, decisions are based on past experiences, religious beliefs, peer or family influence, education, or upbringing. However, the focus here isn’t on how we choose, but on the fact that there is always an opportunity cost involved. We cannot be in two places at the same time, or do two different activities simultaneously. We have to choose, and those choices have repercussions.

In this discussion, I’ll extend this concept to our professional settings, where the trade-off theory of money, time, and location comes into play. We can’t maximize all three aspects to our satisfaction; we have to compromise on at least one.

Here are three scenarios:

1. Choosing Money and Location: In this scenario, you prioritize earning more and working in a specific location, with the trade-off being time. For instance, if you’re an accountant in a competitive location, you might need to work longer hours to make more money. If you’re a lawyer in a prestigious New York firm or a finance professional on Wall Street, you might earn a lot and be in your desired location, but you’d have to work long hours and have little free time.
2. Choosing Money and Time: Here, you aim to earn a good income and want to control your time, so the trade-off is location. For instance, you could be a doctor working in a remote area with fewer competitors, allowing you to work less and earn more. A consultant might take on remote jobs that require extensive travel but offer high income and flexible hours. A freelance software developer might choose their projects, working strictly 40 hours a week, but be open to working across different time zones or occasionally traveling for meetings.
3. Choosing Time and Location: Lastly, we delve into the third scenario where you choose time and location, with the trade-off being money. In this scenario, you prioritize a specific location and control over your work schedule. This often means accepting a job that pays less because you wish to work fewer hours and be in a specific location – often hometowns or close to family. For instance, you might be a small-town bookstore owner who relishes the lifestyle and proximity to your home but earns a modest income. Alternatively, you might be a teacher in a rural town. The job offers plenty of time off during holidays, promoting a balanced lifestyle with ample personal time. The school is in the same town you grew up in, providing a cherished sense of community. However, compared to what you might earn in a larger city or a different profession, your salary is modest. In this scenario, money is the trade-off.

In each scenario, the third element is compromised to allow the choice of the other two. This illustrates the concept of opportunity cost in our professional lives, and how we must make decisions based on what we value most.

In conclusion, out of these three preferences – money, time, and location – we have to select two and forgo the third one. This varies from person to person. For some, money and location are paramount; for others, money and time are vital, while for others still, time and location hold the most weight. It’s a matter of personal preference.

Personally, if I had to select two, I would choose time as I believe it to be the most precious asset in our lives, and location, as I am well-settled in my current town.

However, earlier in my career, I would have likely chosen money and time since I was flexible about location. As I settled in my current town, I would have prioritized money and location, but as time became more important, I eventually settled on time and location.

These choices, like any other, carry an opportunity cost. We always make choices at the expense of foregoing other options. We can’t be everywhere at once or engage in all desired activities simultaneously. We have to choose, using our wisdom and accumulated experiences to make the best decisions based on our current stage in life.

The final point I want to convey is that you can’t have everything in life. You must make choices, be content with them, and know that there’s always an opportunity cost associated with these decisions. Regardless of your choices, you must be happy with them, understanding that you can’t have everything. You reap what you sow. Your focus will dictate what grows in your life.

Ultimately, whatever preferences you select in this trade-off theory, you must be content and enjoy your life.