Marginal vs Full Cost

Gregory (Scotland Yard detective): "Is there any other point to which you would wish to draw my attention?"
Holmes: "To the curious incident of the dog in the night-time."
Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident."

That's an excerpt from Sir Conan Arthur Doyle's "Silver Blaze," a Sherlock Holmes novel, and it highlights a particularly curious hiccup in how our brains work: we're exceptionally bad at noticing what's not there.

In the story, detectives search everywhere for clues. They dust for fingerprints, look for fibers, etc. They're looking for the presence of evidence.

Sherlock is the genius because he identifies the absence of a clue; thereby making it the most important clue of all. The dog's silence means it recognized whoever was committing the crime.

What this costs you

Every time you're making a choice, you're evaluating what it is going to cost. There's the marginal (or face value) cost, and full cost.

Here's how it plays out, and trips you up.

Consider you're starting a business, but you don't have a big budget so you get free business cards from VistaPrint.

At face value it's very low cost. There are no dollars involved.

You hand them out to prospective clients who you're perfectly suited to work with. They have a huge budget, want the service you're providing, and you guys would do amazing work together.

They look at your card and see the watermark on the back.

Get your free business cards from VistaPrint, too!

They're considering putting you in charge of a massive project involving a lot of money, and you're showing them you're not willing to invest in the essentials.

They never offer you the job.

You won't know why. The phone just won't ring.

The dog's not barking.

You're paying the full price of your decision, but you'll never see it.
Every choice you make is paid for in full whether you know it or not.

Every time you choose to do it the cheap way instead of the right way, you wind up paying more.

"If you need a machine and don't buy it, then you will ultimately find that you have paid for it and don't have it". ~Henry Ford

Value

When I talk with potential clients who would rather do it on their own, I see that they're signing up to pay twice for results they're not going to get. They think, "Boy, that's expensive! I bet I could do it myself!"

Cut to 3 years later and they've missed out on all the payoff from investing in themselves compounded by 3 years. (You're not just farther behind: You're farther behind multiplied by how far you could have gotten with what you learned in those 3 years.)

Penny smart and a pound foolish.

Every time you consider investing in yourself, it's difficult to identify the costs you're not going to see. Trust the people who have been where you are & can tell you. They're desperately trying to save you from making a costly mistake trying to avoid a marginal expense.

You can't afford not to.

Written & posted by Jonathan on December 17, 2016.
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Jonathan Pritchard started his professional journey at age 13 when he got paid $200 to do magic tricks at a company's employee summer picnic. From there he has traveled the world as a corporate speaker, entertainer, and trainer. Jonathan is the author of several books focused on mindset & motivation. You can find him living in Chicago practicing Wing Chun kung fu.
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