How to Avoid the Sunk Cost Fallacy and Move On in Life
Hanging on to something we know we should let go; whether it's a bad relationship, a losing investment or a grudge. This tendency only hurts ourselves in the end.
There are so many reasons we do this, but one of this biggest is....
The Sunk Cost Fallacy
A sunk cost is something that has already been spent and is now gone forever.
You do and will have sunk costs in your life
You will emotionally invest in people, time at a job and money on investments. The thing is, many times it will turn out to be a waste!
Sounds Pretty Crappy, Right?
Well, it doesn't really need to be that way!
As people we are driven by two things:
• The Desire for Gain
• The Fear of Loss
Many psychological studies claim the fear of loss is two and a half times more intense than the desire for gain.
Think about that for a minute! We take the pain of loss more than twice as hard as we experience the joy of gain.
That's mind blowing!
.....and also a big part of the problem.
We don't want to feel loss or pain at such a higher emotional level than our desire for gain, that we hold on. We don't cut our loss and move on.
We won't accept the three, four, five years spent in a relationship was meant for nothing. We want to stay with that person so all that time MEANT SOMETHING - So it's not a SUNK COST.
Think about this though. Would you rather have 2 years of possibly happiness by getting out of a bad relationship or eat another two years just so the past five were not a "waste."
We hold onto losing investments, watching a stock nosedive. Waiting for it to rebound when we know we should take the loss and move on to a different investment.
Accept the Sunk Cost and Move On!
Rather than investing more:
• Time and emotion in a bad relationship
• Money in a losing investment
• Angry emotions toward someone that screwed you over
Why not just resolve to accept what you have invested up till this point is a SUNK COST.
It is gone, unrecoverable and we can now move on to better things.
When you have the ability to admit something didn't work, that you've changed your mind or made a mistake - then you will have the power to accept that unfortunate events occur as a natural course in life.
Now you will have the power to move on, don't let the sunk cost fallacy keep you from happiness!
Best Regards,
sometimes one is staying for the sunk cost,
but other times it's simple fear of moving on.
Fear that the next thing won't be even this good,
Fear of being alone.
Fear of not being able to survive on your own,
and the biggy,
fear of hurting the other person,
as if you are not hurting them by staying.
I have experience of all these things and more.
lol
good one @scaredycatguide
Oh yes, for sure. Sunk Cost is just one of the big anchors holding someone from making a change.
Too true--and very well said. I recently pulled the plug on just such a relationship myself.
This is my first post of yours I've read, so definitely following! I do all-original content, follow back if you dig it.
Good for you man! Nice picture of that old ford, by the way. Upped that post. :-)
powerful post and it does explain a lot, it even explains why my wardrobe is full of cool 80's clothes that I just don't want to throw out ;-)
Nah, that isn't a sunk cost. That's called vintage....it's cool thus a positive ;-)
Love it, I'll have to tell my wife that it is vintage and I have to keep the stuff ;-)
This applies to so many areas of our lives. I try to keep this in mind when considering selling a loser stock for one with much more upside potential. I used to believe "you never lose money in the markets unless you sell a stock and unrealized losses become realized losses". Then after year of sitting on unrealized losses and going nowhere, I decided that my belief was full of crap and I wanted to own stocks that are actually going somewhere.
Then, consider retailers...some developers will purposely build outlet malls in hard to get to places (Like Barstow, CA) so by the time you spend the day there, you'll be more inclined to buy something because"you came all this way" and want something to show for it. Those tricky bastards!
That's pretty genius sales tactics!
Indeed it is. Plus it can help a depressed econony in those isolated areas. They actually will drive out bus loads of seniors for free for a shopping day!
It's funny, I have been admiring my mistake and moving on with things in my life for some years now without realising there is a term for not doing it. I like it
Yes, we are complicated yet simple creatures sometimes ;-)
Thank you for sharing with us! I hope you enjoy the upvote! i follow you,,,
Great post my friend thanks for sharing the great post
It's just so hard! Haha. But I completely agree. It's honestly just learning from your mistakes and figuring out why you lost some. That way, you won't make the mistake again and therefore win more in the future.
You explain this in a great way that is easy to relate to. I have spent several years in my previous relationship with a huge desire to leave but stayed far to long. Now that is many years ago. I can still feel this strange and frustrating feeling of wanting to leave but still not being able to.
What I read here is making sense to that situation:-)