COSTS

Ok, so I'm listening to our Advanced Microeconomics class lecture last Friday and our prof (who happens to be my personal mentor) gave us a really interesting insight. We were talking about costs (from a marginalist perspective) and he digressed to expound on the topic in real life (as is the case most of the times). During the first few years that we have her on earth, we incur pure total costs for our parents. We eat, study, splurge and pretty much expend our parents' income whereas we hopefully generate income in our remaining years. So if we are to live for 63 years, our first 33% of lifespan would be pure expenses then hopefully, we use the remaining 67% to be productive. It is really interesting! So I guess the ultimate question would be, when would the break-even point be and would we yield a higher rate of return than what our parents (or elders) spent on us? Would we generate a decent ROI?

So, there. The diagram looks somewhat like this:


Pure total costs Lots of Revenues
___________l_______________________________________
21 years 40 or more years