blog · David's Thoughts · Random Stuff · Random Thoughts · thoughts · Uncategorized


Howdy, David here again! In order to help Jerry keep up with her schedule, I have agreed to post a blog entry once a week (or so).

When I was thinking about what I wanted to write today, my first thought was “I want to make sure whatever I post brings value to Jerry’s readers.” And that thought gave me my first topic!

Value. We hear that word regularly, but do we really consider what it actually means? Several years ago, I attended a course on marketing. As part of that course, the instructor provided an equation that became a touchstone for me. It was a mathematical equation for value. Here is what he wrote:

Value = Benefit – Cost

The premise is that value is simply the difference between how much we think any particular decision will benefit us, compared to the cost we perceive with that decision. In order to make any choice, we have to see that value as positive – the benefit has to outweigh the cost.

Now, one of the mistakes a lot of people make when they encounter this concept for the first time is that they automatically assign a “dollar sign” to the variables, especially the cost portion. But cost, and benefit, are not only not solely tied to money, but they are also completely subjective. Each individual will evaluate the cost and benefit of any decision completely through their own personal lens.

So, at this point, allow me to offer an example – this post. Some of the costs associated with this post include the time and effort it takes to read it. There are also “opportunity costs” to consider – those things that you aren’t doing right now, because you are currently reading this.

Against these costs, consider the benefits. Maybe you have an interest in economics. Maybe you just have a curiosity about why people do the things they do. Maybe you were just bored and looking to kill a few minutes. 🙂

Regardless, my hope is that the cost of this post, to you, was more than offset by the benefit you received from it. I hope this post did, indeed, provide you value.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s