For more than a century, the phrase, “There is no such thing as a free lunch” has been a regular part of the American experience.  Popularized more than 40 years ago by famed Nobel-prize-winning economist Milton Friedman, the adage is a way of expressing the ever-present existence of opportunity cost.

You can’t get around it, you can’t avoid it, and you can’t ignore it.  Someone, somewhere will pay for your actions.  Right now, the very fact you are reading this screen presents an opportunity cost in that you could be outside throwing a frisbee, or on a plane traveling to Bora Bora.  Financially, the implications of opportunity cost, which I explained years ago in You’re Spending Your Millions $ 1 at a Time, are staggering.

The biggest thing new investors seem to forget, or not realize, is that doing nothing has its own opportunity costs.  To help illustrate why, in cold, hard facts and figures, I wrote There Is No Such Thing as a Free Lunch: A Look at Opportunity Cost. It can open your eyes how waiting, even five or ten years, to start fully funding your retirement accounts can cost you enormous sums of wealth.

What, Exactly, Do Economists Mean When They Say There Is No Such Thing As a Free Lunch? originally appeared on About.com Investing for Beginners on Tuesday, January 31st, 2012 at 02:42:53.