Opportunity Cost

When you make a decision, the opportunity cost is the benefit you give up by not choosing the next best alternative. It represents the value of what you miss out on when picking one option over another.

For instance, imagine Bob has $100 and is deciding between buying chocolate or investing in bitcoin. If he spends his money on bitcoin, his opportunity cost is the enjoyment he would have gotten from eating the chocolate. In short, opportunity cost highlights what you sacrifice when making a choice.