No Such Thing As A Free Lunch.

No Such Thing As A Free Lunch. June 21, 2011

You’ve probably heard this phrase before.  Milton Friedman was known for making this phrase famous.

The idea behind the phrase is simple:  everything has a cost.  There’s a cost to accepting an opportunity and a cost for rejecting one (opportunity cost).  When we choose to accept opportunity A over opportunity B, we are missing out on the things we would gain from B. Make sense?  So even though opportunity A may appear ‘free’ you’re actually giving up your time, energy, effort, and anything else from opportunity B that would have been yours had you chosen it over opportunity A.

Someone always pays.

Someone always pays for lunch.  It doesn’t matter if the sign says free – someone is footing the bill.  It may be your employer, it may be the taxpayers, it may be your parents; someone pays.  In many cases, the person paying is YOU…but it’s masked behind sneaky tactics.

No Such Thing As A Free App

Maybe the phrase should substitute “App” for “lunch.”  Free apps are a great example of how the ‘free lunch’ idea applies to us in real life.  If you’ve ever downloaded a free app for your phone, what comes with it?  Ads.  Yep, you’re paying for the app every time you have to wait for the ad to show.  If that’s not a big deal to you, the cost is worth it to you – but understanding that there’s a cost is what’s most important.

The next time you see something that says ‘free,’ ask yourself “Who’s really paying for this?”  You might not realize that you’re paying for it without even pulling out your wallet!

Can you think of anything that was offered to you for free?  Were there any caveats?

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