The Road Not Taken

| August 20, 2021

The simple fact is that we cannot do everything. When we choose to do one thing, we are also choosing not to do something else. In economics, this is called opportunity cost. Because neither time nor resources are limitless, we need to make value judgements about how to spend both. Few people understand opportunity cost. A typical example is the second home. When we buy a second home, we are foregoing the income (unless we rent it) we might earn elsewhere. We also need to devote funds to taxes, insurance, and maintenance. Since time is not limitless, we are also foregoing the opportunity to do other things. The second home may make sense, particularly for retired people who have friends and social lives that they value in their second residence. Yet, we should always know the opportunity costs of the things we buy and factor them into our plans. This is true for boats, airplanes and expensive cars as well as real estate. Often, the income foregone is enough to pay for many alternative experiences. Just as often, we are prevented from achieving many of our goals because we failed to understand that opportunity cost is unseen. Robert Frost captured it best in his poem The Road Not Taken:

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;
Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.
I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I -
I took the one less traveled by,
And that has made all the difference.

Citation: From The Poetry of Robert Frost by Robert Frost, edited by Edward Connery Lathem. Copyright 1916, 1923, 1928, 1930, 1934, 1939, 1947, 1949, © 1969 by Holt Rinehart and Winston, Inc. Copyright 1936, 1942, 1944, 1945, 1947, 1948, 1951, 1953, 1954, © 1956, 1958, 1959, 1961, 1962 by Robert Frost. Copyright © 1962, 1967, 1970 by Leslie Frost Ballantine.