The return you could get on your money if you invested it. For example, if you hold cash instead of investing $100,000 and assume the stock market return 7% per year, the opportunity cost of keeping the money in cash would be $7,000 (= 7% of $100,000) a year.
Susie Q is a retired property-casualty A professional who assesses and manages the risks of financial investments, insurance policies and other potentially risky ventures. Source: www.investopedia.com/terms/a/actuary.asp More and mother of two adult children. As her children were moving from their teens into their 20s, she found she was frequently a resource on many, many financial decisions and she had insights and information she could provide to them. She spent a significant portion of my career building statistical models of all of the financial risks of an insurance company and interpreting their findings to help senior management make better financial decisions. She is the primary author at Financial IQ by Susie Q and volunteers with other organizations related to financial education.