There Ain't No Such Thing As A Free Lunch - TANSTAAFL

What does 'There Ain't No Such Thing As A Free Lunch - TANSTAAFL' mean

There ain't no such thing as a free lunch (TANSTAAFL), also known as "there is no such thing as a free lunch" (TINSTAAFL), is an acronym that attempts to describe the cost of decision making and consumption. "There ain't no such thing as a free lunch" expresses the idea that even if something seems like it is free, there is always a cost, no matter how indirect or hidden.

In finance, TANSTAAFL refers to the opportunity cost paid to make a decision, as the decision to consume one product usually comes with the trade-off of giving up the consumption of something else.

BREAKING DOWN 'There Ain't No Such Thing As A Free Lunch - TANSTAAFL'

The TANSTAAFL concept is important to consider when making all types of decisions. It can help consumers make wiser decisions by considering all possible hidden or indirect monetary or nonmonetary costs that a decision may incur.

The TANSTAAFL concept is a byproduct of the economic fact that resources are scarce and the consumption of them in a capital market society includes competition from others who also want to partake in those goods and services. Thus, goods and service providers of all types will require some type of cost.

The phrase overall is thought to have originated because many saloons in the U.S. used to provide free lunches to their patrons but required them to purchase drinks in order to get them. Although the phrase is a double negative, it is not intended to be interpreted as such. Therefore, the alternate acronym TINSTAAFL is often used.

TANSTAAFL has also been referred to when discussing crime and corruption. In the 1930s Robert Caro, Fiorello La Guardia, used the phrase “no more free lunch” in his campaign against crime and corruption as the mayor of New York.

Other popular references to the phrase can also be found in Robert Heinlein's "The Moon Is a Harsh Mistress" as well as in Milton Friedman’s book titled “There Ain't No Such Thing As A Free Lunch.”


In the investment market TANSTAAFL also helps to explain risk. While at the lowest end of the risk spectrum, Treasury bills, notes and bonds offer a nearly risk-free return, the opportunity cost is the time period you must wait to receive your return and the other uses for your funds that you could have invested in during that time period.

As an investor moves higher on the risk spectrum, the phrase TANSTAAFL becomes even more relevant as investors invest their money in hopes of gains above standard Treasury returns yet with risks that growth prospects may not be achieved and their investment could be lost.