Opportunity Cost
The value of the best alternative not chosen. The true cost of any decision includes what you gave up.
Definition
In personal finance, opportunity cost on a $80k home down payment (at 7% expected return) is ~$5,600/year — money you could have earned investing instead. Most rent-vs-buy calculators omit this and overstate the case for buying. Apply opportunity cost to every major financial decision for an honest comparison.
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