Journal of business school

20 19-05-0 1 official account of business school magazine

When I visited my daughter some time ago, everyone found that Mabel Yuan looked ordinary, but in fact he was an extremely self-disciplined person.

We also see that she will make her own breakfast and listen to economics courses between breakfasts to enrich herself.

Some people will wonder, if you are not in this field, why do you want to study economics?

I think the answer can be found in the economics of milk coke.

There are many examples, such as:

You want to buy an alarm clock at the school grocery store next door. Price 20 yuan. A friend told you that the same alarm clock is only 10 yuan in the downtown supermarket. Will you go to town to buy this 10 yuan alarm clock? Or go directly to the grocery store next door?

Most people choose to go to the supermarket to buy alarm clocks. Let's look at the next question:

You want to buy a laptop at the school grocery store next door, which costs 25 10 yuan. The same computer costs 2500 yuan in the supermarket in the city.

Where will you buy this computer? Most people will buy them at school.

This is a question of cost performance.

Thinking about some things in daily life with the thinking of economics is probably the reason why we should study economics.

As Charles Munger said: To understand the world, everyone needs to find their own mental model, that is, the potential thinking model.

These models should come from different disciplines and aspects, and about 80 to 90 models can help you deal with more than 90% of the problems.

All the basic disciplines and theories we learn will become our own mental models.

So is economics.

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give a discount

Whether we are losing weight or doing other things, we are often tied down by procrastination.

"This ice cream is delicious. I finished writing today, and I will officially lose weight tomorrow.

I really want to see this movie. I'll finish it today and tomorrow. "

Why do we often choose to delay?

We may attribute it to laziness, lack of arrangement or lack of sense of time.

But there is actually another reason, that is, instant happiness is always particularly attractive, and people are often drunk today.

For example:

If someone tells you that you have two choices, one is to give you a candy after 100, and the other is to give you two candy after 10 1 0. You might say, of course, 10 1 day. Give me two tablets.

But if this person tells you whether to give you a candy now or two candy tomorrow, you may hesitate. It is even possible that you have chosen to eat instant sugar now. Who can wait for tomorrow?

This includes the content of "discount" in economics.

Discounting is to compare the value of funds at different time points.

In other words, what Yuan You can get today is different from what Yuan You can get next month. Converting future earnings into today's value is called discounting.

One of the reasons why people can't resist instant pleasure is that happiness also has a discount rate.

However, achieving the goal requires hard work and waiting. We can't turn the sense of accomplishment of accomplishing a goal into the present happiness.

The book Alien says: Anyone can go from ordinary to extraordinary after 1000 hours of tempering.

Intensive reading of Jun's dictionary entry "188: deliberate practice" also says that anyone can become an expert in this field as long as he practices deliberately for ten years.

After all, talented people are a minority, and more people become experts through practice.

No matter what field you want to be an expert in, these ten thousand hours are necessary.

If you have a dream or goal you want to achieve, you must go through a long and thoughtful practice.

So, would you choose a candy today or a thousand candy ten years later?

02

compound interest

In the book "Poor Charlie's Collection", it is mentioned that the principle of compound interest is a very important knowledge in cosmic wisdom.

Compound interest is a method of calculating interest. According to this method, the interest will be calculated according to the principal, and the newly obtained interest can also be calculated, which is commonly known as rolling interest.

Einstein said: compound interest is the eighth wonder of mankind.

During the period of compound interest, seemingly insignificant small progress or small retrogression, over time, will make the ontology produce great progress or retrogression beyond imagination.

Use the movie "A Trip to Busan" to illustrate that when a zombie bites a person, it will become two zombies. When two zombies bite a person, there will be four zombies ... and so on, a car full of zombies will appear in an instant.

You can imagine how significant the compound interest effect is.

Learn to think with compound interest. Take financial management as an example. As long as you don't lose money and accumulate slowly, wealth will accumulate for a few days.

The same is true of investing in yourself.

If you invest money in yourself, take part in training to improve your knowledge reserve and ability; Take part in more social activities, broaden your horizons and work hard.

If the annual income is 10%, the income brought by promotion and salary increase in a few years will be far greater than the investment at that time.

Compound interest needs to accumulate over time.

So learn to be patient and treat time as a friend.

Don't overestimate what can be accomplished in one year, and don't underestimate what can be accomplished in five years.

03

Paid cost

Sunk cost refers to unrecoverable expenses, such as time, money and energy.

Dust-laden fitness cards and beauty cards that have been put into cost but not fully utilized are sunk costs.

In life, sunk cost will affect our judgment and make us fall into the trap of sunk cost.

Stiglitz, winner of the Nobel Prize in Economics, once used a life example to illustrate what sunk cost is.

You booked a movie ticket, and you can't refund it after paying it. Before watching it, you don't know what the film is like and whether it is to your taste.

When you walk into the cinema and sit for 30 minutes, you will feel sleepy and bored.

At this time, should you leave the cinema?

Quite a few people will think that since they have bought tickets, it is too wasteful to leave without looking.

This idea shows that you have fallen into the trap of sunk cost.

Because whether you leave the cinema or not, the money will never be recovered.

And if you don't leave, but you can't enjoy the movie, it will not only make you miserable, but also waste the time you could have done other things.

The same applies to love, if two people get along for a long time and find that they can't continue each other.

Some people will think, I have spent so much effort and investment on each other, how can I let go?

However, the fact is that it will be more painful not to let go.

Stop loss in time is more important than clinging to the past.

Keynes said: economic theory is not a dogma, but a method, an intellectual tool and a thinking skill to help those who have it draw correct conclusions.

In Xu Xiaoping's speech at the graduation ceremony of his alma mater, the University of Saskatchewan, when talking about how to form a big pattern of life, he also mentioned a point:

In life events, we should learn to use the economic thinking model.

Think like an economist, and give your life a real overall view.