What is the opportunity cost of a large purchase?

The wealth the money would have become if left invested. At 6% for ten years, $85,000 not spent grows to about $152,000 — so the purchase's true cost is roughly double its sticker before running costs, less whatever resale returns.

How much of my income can I spend on one purchase?

The house convention puts the safe-load line at 20% of one year's net income for the first-year outlay, sticker plus running costs. Past 45%, or past half a net year in sticker alone, this instrument says reconsider — a convention for judgment, not a law.

Should I count resale value when deciding to buy?

Yes, conservatively. Resale received at the horizon comes straight off the true cost — but optimism here is the classic leak. Enter what a motivated buyer would pay, not what a listing hopes for.

True Cost of a Purchase — Opportunity Cost Calculator

The manifest — your numbers

Currency symbol display only

Sticker price

The all-in purchase price, taxes and fees included.

Your net annual income after tax

What actually lands, not the gross. This sets the load line and your hourly value.

Real weekly working hours

h / wk

Include the commute, the calls at dinner, the Sunday inbox. Honest hours.

Return if invested instead assumption

% / yr

Default 6% nominal — a deliberately unheroic figure for diversified capital. Change it; the scenarios below test ±2% regardless.

Horizon

years

Running costs optional

Σ/ yr

Insurance, storage, maintenance, subscriptions the thing drags behind it.

Resale value at horizon optional

% of price

Be conservative. Sellers of ten-year-old anything usually are not.

Nothing you type leaves this page. The instrument runs entirely in your browser; there is no account and no record.

The reading

Proceed, eyes open.

$169,331

true cost in year-10 wealth

The ledger

Sticker price, today	—
That sum if invested — 10 years at 6%	—
Running costs, each year's outlay invested as paid	—
Less resale received at horizon	—
True cost, in horizon-year wealth	—

Three markets, same purchase

If money not spent returns	True cost	× sticker
—	—	—
—	—	—
—	—	—

What moves this result

——
——
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What would sink this reading

The return assumption is doing quiet work. If your alternative is cash at 1%, the true cost falls sharply — and the purchase looks better than shown.

Resale optimism is the classic leak. If the asset fetches half what you entered, add the difference straight to the total.

Running costs creep. Insurance reprices, storage rises, the thing ages. If in doubt, re-run with running costs ×1.5.

Next on the desk

No. 04 · Capital · LiveCash, Finance or Lease No. 02 · Time · LiveDelegate or Do It Yourself No. 10 · Acquisitions · LiveCharter, Fraction or Own

Questions people bring to this desk

What is the opportunity cost of a large purchase?: The wealth the money would have become if left invested. At 6% for ten years, $85,000 not spent grows to about $152,000 — so the purchase's true cost is roughly double its sticker before running costs, less whatever resale returns.
How much of my income can I spend on one purchase?: The house convention puts the safe-load line at 20% of one year's net income for the first-year outlay, sticker plus running costs. Past 45%, or past half a net year in sticker alone, this instrument says reconsider — a convention for judgment, not a law.
Should I count resale value when deciding to buy?: Yes, conservatively. Resale received at the horizon comes straight off the true cost — but optimism here is the classic leak. Enter what a motivated buyer would pay, not what a listing hopes for.

Methodology — the formula, printed

Everything below is calculated from your inputs except the market return, which is an assumption you control. Nothing is fetched, nothing is looked up.

true_cost  =  P·(1+r)^n  +  C·((1+r)^n − 1)/r  −  S·P

P = sticker price      r = assumed annual return
n = horizon, years     C = annual running costs
S = resale, share of P (received in year n, so not discounted)

Your effective hourly value is net_income / (weekly_hours × 46) — 46 working weeks allows for leave and holidays. Hours of life consumed is P / hourly, on the sticker alone.

The gauge reads (P + C) / net_income: the first-year outlay as a share of one net year. The safe-load line sits at 20% — a house convention, not a law of nature; past it, a purchase starts competing with your savings rate rather than your spending. Above 45%, or above half a year's income in sticker alone, the instrument tells you to reconsider.

Limitations. Returns are nominal and taxes on investment gains are ignored, which overstates the opportunity cost somewhat; resale is nominal, which understates it. The two lean against each other but do not cancel. This is a model for judgment, not an accounting document.