Wednesday, November 7, 2012

Amazement of the NPV Concept

Well, actually I'm not gonna start this writing by making some outline then correlating every idea I got in my mind. So, just enjoy these jumbled ... writings.

I, was naturally taught in my society to mind the cost and benefit for every single thing I do. Studying in faculty of economic taught me so, so did my organization. The cost-benefit concept was one on concept we firstly learned in principle of economics and this is my favorite so far. How we see everything and calculate the cost and benefit from undertaking those things. I love how this concept is very applicable in my daily life.

My adoration for this cost-benefit concept continued as I joined organization in my campus. Moreover, in my second year here, these concept has been accompanying me during this life learning process. As I learned valuable things day by day such as leadership, self-management, team managemet, the cost-benefit concept is the basics that I'm always hanging onto.

Until one day, I found that relying on this concept to be applied whenever we meet different conditions, is not forever good. Calculating just based on this concept will naturally 'prohibit' us from seeing opportunities, especially the long term one.


Well, I learned finance a lot during this semester, one thing that I've been so addicted to. Then I learned about this another powerful concept : the Net Present Value concept. Theoretically, this is what Wikipedia said
In finance, the net present value (NPV) or net present worth (NPW)[1] of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows of the same entity. -Wikipedia.
In my language, I prefer to translate it as seeing the continual benefit (or loss) that we will get in the future, from the current perspectives. Got it ? In simple, just call it as future benefit. Eversince I learned it in class and there's something unexpected surprise came into my life (tell ya later about this), NPV has become my new powerful tool.

This, is what I forget during all this time, this NPV concept. I forget that maybe, things we are doing right now could be having big benefit in the future, but yes, it takes a lot of Initial Outlay ( call it as modal, hardworks, sacrifices, etc). I learned that my mistakes so far is just calculating benefits of every single thing we do every single stuff I decide just based on the current perspective. I feel opened by this NPV concept. So far it has succesfully influence me to be more open-minded and so I realized how narrow minded I am after all this time, just counting the cost-benefit of everything. Well I have to admit sometimes I questioned why do people do things they do, yes I raised my eyebrow seeing all of these.

So, here I tell you. During this year, I questioned a lot of this important things from my very.own.personal.perspective (underline it). Yeah, I hardly questioned about that. About every sacrifices, hardworks, etc. For all of you who happens to land here and stalk this, don't get me wrong. It's not that I put special treatment on this, it is just I have some sentimental stuffs towards this one. Until that day came, and I got that some kind of unexpected surprise. Again, don't get me wrong :p Literally, it was also a surprise. Suddenly I feel that, everything I have been doing starts showing the "future cash inflow" or the benefit. I'm so grateful to feel the sensation when everything starts to be worthwhile. So, it was the day when I realize the existence of NPV concept in the real world. The day when I feel the NPV from these hardworks is daaaaaamn positive :) Even If I take a look back from the very  first beginning I land here as nothing, this-NPV-related-thingie is also my reason why, one of my personal goal I want to get from my involvement here. Moreover, I wonder whether this is the way the universe works towards things we really want, everything I get from this day seems to support me in some other things I'm currently doing.

So, in conclusion, what I want to pinpoint from this post is that I want to share. This is not about the story, of a random special day when I feel "whoaaah" or something, made in order to make you all get confused or curious . Here, I want to share my amazement towards the NPV concept that currently very represent things that are happening in my life. I want to share that we have to consider the long term effect of everything we are pursuing. Well, If I have to put some words of wisdom to this conclusion, it would be " don't just look or decide things based on the cost-benefit calculation, mind about the NPV. Mind that those initial outlays or in simple, sacrifices and hardworks, would be worthwhile in the end. Even if you still can't figure out how "worthwhile" looks, just believe that it is exist. Because, then again, I have just experienced it :)

and Bismillahirrahmanirrahiim for every other things, aamin 0:)

* does this color combination I choose kinda rings a bell ? :p *

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