What the Knicks could have done with the $60 million they paid Phill Jackson

So much opportunity cost.

There’s a lesson here. And I think that lesson is fairly simple: everything you do with your money outside of investing it comes at an opportunity cost.

So let’s say you own the New York Knicks. You decide to hire Phill Jackson and pay him a massive amount of money. Then he starts to do some weird things and now you want to get rid of him. You owe him $60 million for only 1,200 days of works. This is a true story btw.

So what could have you have done with that $60 million if you invested it instead? Let’s look at some examples:

  • If the Knicks invested that $60 million in the S&P 500 SPY ETF instead of paying it to Phill Jackson, it would now be worth $78 million.
  • If the Knicks invested that $60 million in Bitcoin instead of paying it to Phill Jackson, it would now be worth $235 million.
  • If the Knicks invested that $60 million in Apple instead of paying it to Phill Jackson, it would now be worth $116 million.

No one should go all in and bet the entire farm on cryptocurrencies. Or even on Apple. The examples above are just meant to illustrate that if you have the money, and you’re thinking of making an investment (like paying one man in sandals with a yoga mat $60 million for a few days of work), you best check your local financial markets and make sure you understand what you’re foregoing.

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