Not showing opportunity costs

What is opportunity cost?

The opportunity cost of an investment is the cost of the result you would get it you invest the same amount in another investment of similar, or different, financial risk. It may show that a substantial gain could be made by using a different investment strategy.

Why is opportunity cost important?

Financial planners should look at the opportunity costs of any investment strategy, as part of a well-considered wealth management strategy, in order to ensure that they are investing for maximum returns.  But most financial planners show projections of the cumulative return of a proposed investment given certain assumptions, and disregard the opportunity cost of alternatives. Its best to beware of these projections, as they don’t give you the full picture.

At Archimedes Financial Planning, we calculate the opportunity cost using the sophisticated techniques of the petroleum industry, the Efficient Frontier. This is a powerful evaluation tool that assists our clients to make fully informed decisions as to rewards and risks.

Contact us today for real advice, without marketing ploys.

Client Account Registration

Click here to register your interest for a Client Account with Archimedes Financial Planning.

Client Login

Restricted to existing clients of Archimedes Financial Planning.

Archimedes Clients are:

  • Professionals of any age
  • SME Business Owners
  • SMSF Trustees

Click Here to see our Client Map

Click the map to find out more about our Clients