True cost
Opportunity Cost
Every choice has a second price: what the same money would have done instead. Enter the sum you are committing, how long it stays committed and what it could otherwise earn, and see the cost that never appears on the invoice.
How is this calculated?
The alternative value is the amount compounded at the rate you entered: amount × (1 + rate)^years. The growth you give up is that value minus the amount, and the true cost is the amount plus the forgone growth.
Nothing is discounted back to today, and no contributions, fees or tax are modelled. It is deliberately simple: the point is to show that the price is not the whole cost.
About this tool. It prices one side of a choice, not the choice itself. A commitment can be worth far more to you than the return the same money would earn elsewhere, and that is a legitimate reason to make it. Nothing you enter is stored.
Worked example
A realistic scenario, already filled in. Open it, then change one number at a time to see what actually moves the result.
Committing 5,000 for five years
At 5% a year the 5,000 would become roughly 6,380 elsewhere, so the growth you give up is about 1,380. Change the horizon to ten years and the forgone growth becomes larger than the amount itself.
Open this example in the tool → The numbers live in the link, so you can bookmark it or send it to someone.
Guides that go with it
How to Make Decisions When You Have Too Much Information
How to Make Decisions When You Have Too Much Information You have 40 open browser tabs, three half-read papers, a spreadsheet nobody else understands, and a deadline. The problem is not that you lack…
The 80/20 Rule for Making Better Decisions
You have forty things on your list and eight hours of actual decision-making energy. That is the real dilemma behind 80/20 decision making: not whether the Pareto principle is true, but whether you sh…
How to Make Decisions Based on Facts Instead of Emotions
You are about to learn a repeatable process for separating what you know from what you feel when a decision matters. The goal is not to become a robot. Emotions carry real information, and you should…
Frequently asked questions
What exactly is opportunity cost?
It is the value of the best alternative you give up when you choose. Committing 5,000 to something means not having that 5,000 invested, saved or available for anything else, and over several years the difference is usually much larger than people expect.
Which rate should I use for the alternative?
A rate you could realistically earn on money you already have access to, such as a savings account or a diversified index fund. Choose a cautious figure: an optimistic rate makes the alternative look better than it probably is and pushes you towards a decision you did not really make.
Is the alternative always the better choice?
No. The comparison is between two uses of the same money, and the one you are considering may be worth more to you than its financial return. The number makes the trade-off visible; it does not decide it for you.
Does it account for inflation and tax?
No. It is a simple estimate at a fixed rate with no contributions. If you want the result in today's money, subtract your expected inflation from the rate before entering it.