Early Retirement Extreme Forums

Trying to figure out how to quantify (or even just qualitatively assess) opportunity cost of alternative lifestyles, and I've hit a wall.
How do fellow forumites tackle the question?

Situation: I am considering what to do next year - work (part or full time), ask for a sabbatical, quit and pursue interests, travel to see friends and family, do something else? next year. I have a good grasp on the pros and cons of my current lifestyle with some degree of modification. Such as work full time + interests and a bit of travel; work part time + more interests + more travel opportunities + volunteering. Yet I have a hard time imagining and assessing the pros and cons of significantly different lifestyles, such as quitting work altogether or pursuing radically different work opportunities, or doing a long hike.

How do you guys think about it / evaluate the upsides and downsides?
How do you evaluate emotional/psychological components of such decisions?
What effects do you consider in your decision matrix: skill development, resilience, happiness, etc.

How to get a grasp on an opportunity cost of not doing something you don't know about/have little experience with?

Any thoughts welcome. The last point is the most baffling to me

Needs more context. Right now it’s like asking in an abstract manner what flavors you should eat. What flavors do you like?

Unknown unknowns are only able to be conceptualized by making them known unknowns; I.e. by experiencing them. In 2019, how the modern world would respond to a global pandemic was an unknown unknown. Now we know. Hopefully we do better next time. Look for cheap (undo-able) ways to try out the lifestyles you aren’t sure if you would like or not in small doses. Then when you have an idea of your taste (which ones you like best), align your life more in that way, then create new experiments tailored to the new ideas based on what you think your tastes have been revealed to be, then make changes into your life towards that. Repeat ad nauseam.

I think you might find "Decisive: How to Make Better Choices in Work and Life" by the Heath bros and "Designing Your Life: How to Build a Well-Lived, Joyful Life" by Burnett and Evans of interest/value. One tip would be if you find yourself stuck in a this or that dichotomy, expand your range of choices. Another would be to actually write out the narrative of three possible lifestyles you could experience over the next 5 years.

I am not particularly risk-averse, so I will sometimes perform lifestyle design experiments upon myself. What if you truly believed that global economic collapse was coming within 10 years? What if having 3 significant others was the promoted social norm? What if working for somebody else for pay was highly likely to put you into anaphylactic shock? What if you had to somehow redistribute any excess income you earned within your social circle? etc. etc. etc.

One model I've been considering lately would be how best strategy for Wordle game might be applied to lifestyle design. Your first guess/attempt of 5 priorities/goals/activities (letters) might just be a combination which occurs most frequently. You might get lucky with your first attempt, but it is often the best strategy with your second attempt to not even include the activities/goals/priorities that did "work" in your first attempt, but instead make entirely different choices which will increase your level of information. Clearly, not a super well-fitting analogy, but could help with the odd rut of finding yourself stuck at 80% satisfied.

It is difficult because sometimes a little of something is qualitatively different than a lot of something. I'm thinking of how on day 5 of my bike trip I couldn't image wanting to go longer than a month or two and the thought of biking around the world (like many have) seemed totally bonkers. But by day 23, it made sense. I could see doing it. My point is that trying to generate more information by doing small experiments doesn't always work. The experiment has to be 'large' enough and it's hard to tell how large it needs to be without doing it. (Doing the buy nothing challenge for a month, where you can just go without and then buy the stuff you wanted in 30 days, vs for a whole year, where you fundamentally rewire your brain, is relevant). I keep this in mind when designing lifestyle experiments and try to make sure I'm crossing that minimum threshold.

I've gotten a lot of use out of spending a lot of time thinking about and iterating my values and purpose. What is important to me, and what things are not important to me? Do I value happiness, meaningfulness, or psychological richness? (or what ratio do I prefer, rather). Do I actually like stability and security, or do they make me twitchy? How much stimulation can I handle before I need to solo up in a cave?

I don't write out a skill matrix for these kinds of decisions but if I did it would include values, purpose, vision, climate, amount and tempo of social interaction/stimulation, exposure to novel experience, tempo of stability/time to process and integrate my experiences, ease of bailing, ...

The opportunity cost of not doing something I don't know much about is to continue to not know about it, and to wonder. If I hadn't done my bike trip, I'd wonder what doing a medium-length self-powered trip was like, and that would bother me, so I did it. I now have experience I'm going to lean on when making future decisions about designing long trips. I don't know what it's like to be a barista, and that bothers me, but only a little bit, and it's actually fine if I never find out, AND being a barista doesn't really fit my values and purpose that I've defined for myself very neatly, so I'm probably not going to do it.

How to get a grasp on an opportunity cost of not doing something you don't know about/have little experience with?

I think by definition this isn't quantifiable, because you don't have enough experience or knowledge about it. But you can take a stab at qualitative evaluation: Imagine you're on your deathbed, and you didn't do the thing. Is it a twinge of regret or a pang, or a surge or a swell? I do this. Something like this is how I decided to go for going remote/digital nomad in 2016, how I decided to built out my cargo trailer and go #vanlife, etc. Not having a go at those things would have bothered me deeply.

A big part of decision-making when it comes to evaluating alternative lifestyles is: what's the cost of bailing/how hard would it be to undo if you find you don't like it? A long hike is easy. If you get 500 miles in and still hate it just walk out, no big deal. If you don't like not working after a few years, no big deal, you can go get a job again.

The opportunity cost of not doing any specific thing is low, but the opportunity cost of being the sort of person who doesn't try radically new things generally speaking is very high in my personal value system. It matters far less to me what specific weird thing I'm getting into next as long as I am in fact trying weird things with some regularity.

Do you care? Your handle might be a clue. Have you tried deciding to be sure about something that you're not sure about?

not sure wrote: ↑

Sat Jul 08, 2023 4:55 pm

How to get a grasp on an opportunity cost of not doing something you don't know about/have little experience with?

When younglings want to go to grad school, they often have some particularly sexy subject of interest they want to research. That's not how it works. Instead they will be given a subject---that of their advisor---that will initially seem boring but eventually turn very interesting as they learn more and more about it.

The answer to your question is that you can't. Getting into something changes you as a person and thus changes your perspective on the activity. In the grad school example, the variable of change was whether something was interesting. It turns out that there's a general law in that the more you know about something, the more interesting it becomes to know more. At least this is the case for explorative minds.

This also implies that an outside perspective on an inside perspective is almost irrelevant to the insider. The outside may think that collecting all the pokemons is a dumb activity. However, that's not how the pokemon fanatic sees it. A meta-rule is that things tend to look better on the inside than from the outside. This extends to bad perspectives. The ability to take other perspectives is therefore very useful when it comes to evaluating experiences. However, becoming good at this ability requires experiencing other perspectives. The only edge I can provide is that "it's there". I can't tell you what it is. You have to experience it for yourself. Still, just knowing that something is worth exploring is gold compared to thinking that "this is the [only] way". That mindset is sticky!

The best model for understanding something you don't know (yet) is that it is random. (This doesn't mean that it's random to everybody, just you. For example, market behavior is a good example for some. Social behavior is a good examples for others.) One way to consider the opportunity cost is https://www.smbc-comics.com/?id=2722 You basically have 7-11 opportunities insofar you're an ERE person. They may not all pan out great, but at least you'll know. Whereas the monotrack consumer careerist only has one opportunity to follow the "I gotta do what I gotta do"-script they likely signed up for when they were 17-24yo or so.

Thank you all for the responses! Very helpful as I continue to process

To the point that a couple of you made, I found this quote in my email box the other day.
Seemed very fitting.
Apparently (I haven’t read the book) comes from a guy named L.A. Paul who wrote “Transformative experience":

"As we live our lives, we find ourselves confronted with a brute fact about how little we can know about our futures—just when it is most important to us that we do know. For many big life choices, we only learn what we need to know after we've done it, and we change ourselves in the process of doing it. I'll argue that, in the end, the best response to this situation is to choose based on whether we want to discover who we'll become.”

If I may summarise/distill the advice/thoughts expressed in the responses:

• Try out lifestyles in small doses, align life to what fits, repeat. Disclaimer: may not work if the quality of large change is on a different plane of experience compared to small changes. But may still be beneficial.

• Write out more detailed narrative of X lifestyles to try on. Use imagination. Evaluate.

• Try a Wordle approach - which words/ideas dominate/surface more frequently. Explore why.

• Discover and iteration on the personal values/purpose. What aligns best with what lifestyle choices.

• Tune into the level of “Bothering”, what would cause regret on a deathbed -type exercise. Very individual.

• Consider how hard it is to “undo” a change. If not hard, why not try and see.

• Opportunity cost of not being the type of person who tries new things - this one resonated the most with me. My journal title is actually “not sure but I’ll try”. So figuring out what to try here, accepting that it would look different and possibly better form the inside that it does from the outside