Remember back in College when you were forced to take Micro and Macro Economics.  If you were a business major like me, you probably hated one and loved the other.  Macro had a more total economic forecast of how our country's economy is doing vs. the world.  Micro really was just concerned with our economy in our own back yard.  Real Estate really is just like being back in a Micro Economics class.  Yes we see that every market in the US is having a slowing or cooling period with real estate, but our own market in our back yard is what drives our business.  The one driving theme that I learned in both these classes and can be applied today is opportunity cost. 

The definition of Opportunity Cost (provided by: Wikipedia)

Every day we make choices and spend money trading back and forth these opportunity costs:

• We could decide to focus our business on developing a web presence and use the Internet to expand our business. 
• We can spend money on print advertising in big newspapers and run ads
• We can farm neighborhoods
• We can do radio, commercial and billboards
• We can drip market our database
• We can blogg
• We can do nothing
• We can work full time or part time

With each opportunity comes a cost or trade-off associated with that decision.  Each decision will either have a cost or a time attached to that activity.  Which decisions you make will depend on what is more important, your time or your money, its just this simple.

So when I decide to try a new activity the first thing I look at is the opportunity cost and weigh all factors.  This simple economic tool has really helped me over the years make better decisions in my business.