Capital Budgeting (feat. Dating)

You want a wife. In order to get this, you have to date.

You don't have all the money in the world to date/marry every woman you come across. So you have to prioritize some women over others.

Your disposable income is what you have to spend on them. If you have apportioned a certain amount of your disposable income to go on dates, then you can view this as the initial cost of the journey to marriage.

But you don't want to waste your time. Some people might be boring. Others might be epic! Others may have bad personalities. Others might be great at first but their future life goals do not align with yours. Others might be good. Just that. Good. Nothing great. Just good. To you, anyway. Others might lead to a lifetime of friendship or business.

So, you just got paid and you have a limited budget for dates. You start your quest on Tinder or Bumble or the other many dating sites out there. You can see from the conversations and the video calls that some are compatible with you while others aren't. Eventually, you will have to pick the interesting ones to go on a date with. You can even pick a candidate in a non-romantic way if you think it can lead to friendship or a business deal.

Next month, again. You go on a date with people depending on your budget. At the end of it all, you will pay the cost (bride price), to marry them. This bride price is the cost to enter marriage. And the woman you pick is whom you think will give you the most benefits for the duration of the marriage.

This is how Capital Budgeting works.

Companies do not have all the money in the world to invest in all the projects they want. They have to pick the projects that would eventually give them the largest/best cash flow (after taking into account the time value of money).

When companies have Mutually Exclusive projects, they pick the one that would give them the biggest/best cash flows and discard the other one.

Sometimes, they would pick the projects that allow them to break even the fastest.

So for example, if you had to pick between two women to go on a date with, and from the phone conversations, you see that candidate A will be more fun than candidate B, you would rather spend the money on candidate A.

Alternatively, if you think that candidate B will spend more time and money on you *shortly* after you spent a certain amount of money and time on her, more than candidate A, then you will go for B.

If a project is Independent, you will accept it regardless of its future benefits when compared to other projects. The only thing you want from this Independent Project is that it gives you a positive cash flow.

So, assume you have 3 candi'dates': A, B, and C.

If A and B are mutually exclusive, you have to choose one of them. As for C, you will accept them if they give you a positive return.

C, in this case, would be someone you would want as a friend or a business partner. As long as they can give you a good friendship or not scam you when doing business, you will go out and hang with them. But as for A and B, only one will be chosen.

When it ultimately comes to marriage, the bride price you pay can be seen as that initial cost to get all the future benefits from your wife. The hope is that the benefits outweigh the cost significantly such that you profit.