Sunk Costs Are Real and Why It Prevents You From Moving Forward
& its impact on your decision-making process; the comfort in silent vlogs of living alone, night routine; Martin Vidal’s writing takes courage; Spotting high-conflict people; flying fox
Sunk costs...
A concept I’ve heard for the first time last week, in Seth Godin’s podcast appearance in The Knowledge Project.
"Sunk cost is a gift from your former self.”
It puzzled me... What gift?
Until I came across Steph Smith's tweet that highlighted 'sunk costs' again in my eyes:
I was intrigued. I had to understand what in the world are sunk costs.
Honestly, sunk cost sounded rather pretentious and mathematical. So if it wasn’t for this tweet, I’d choose to not know this “math-sounding” term.
So, why does this gift from your former self prevent you from moving forward in life, why you should recognize them, and not ignore them?
Sunk cost fallacy is a decision-making bias.
Aka it is your inability to let go of something that's not working because you've invested a significant amount of resources—time, money, efforts, knowledge—in it.
This applies to all things in life: a common strategy at work, a relationship, a career, a degree, etc.
You are so emotionally attached to a decision you made in the past, that you're willing to fall down the rabbit hole, reluctant to change directions, staying with illogical decisions, even though you knew it's not working just because you've "sunken valuable resources" in it.
A real-life example of trapped in sunk cost fallacy
You have a degree in Accounting, which you've worked hard on for 4 years, and gotten a debt on your back because of it.
You'll want to repay those years of staying up all night learning accounting by getting a job at say.. the Big 4, one where you can utilize your skills to the max.
After 2 years of working, you realized your calling is to open a restaurant (cause you love cooking) and you now know how to manage finances.
However, the thought of “I don't want to do this anymore, but it’s all I've been doing. I don’t want to invalidate the time I’ve spent studying on this,” stopped you from pursuing that new restaurant dream.
Instead of leaving the company after 2 years, you decided "another 2 years more" to match all your hard work invested in the degree. This inability to move on earlier, and try to embrace your new identity, that's a sunk cost.
Takeaway: No one likes changes or switching codes. But staying in an unfulfilling relationship may be more wasteful, as you freeze up new opportunities to try again.
Sunk cost, if not dealt with sooner, can get more expensive later on in life
Sunk costs, can be tricky to identify.
These are desires, and decisions that came from the earlier parts of your life.
And the longer you prolong dealing with it, the more expensive it gets later on in life.
The more expensive that sunk cost is, the more it prevents you from moving forward, to meet the person you currently are.
1. Expensive in costing you time, and money you can’t get back.
You have a certain dream for your wedding. Must be in Bali, with tulips all around, like this, like that, etc. And if it's not exactly like that, you don't want it.
You're willing to do what it takes to have the wedding exactly how you pictured 5 years ago.
Suddenly the pandemic hits, you aren't able to fly to Bali for that #destinationwedding. Instead of finding a nearer alternative that mimics Bali, you're holding it off till when circumstances are better = aka 2 years later.
Waiting another 2 years for that 'dream wedding' simply means you're getting older. You'll have to save more hard-earned money (because money depletes). Who knows, maybe by then you'd gain a few kgs, so you'll have to alter that dream dress again.
According to Expero, in Connecting The Dots podcast on Sunk Cost fallacy, "We fall to prey when the stakes are high, by throwing more money when it’s already doomed to failure."
2. Expensive in terms of your ability to quickly produce quality work, and having the energy in doing so.
You've had this idea that you can deliver value by publishing works of art to the internet world, for YEARS in your head. But it stays there, in your head.
You put it off for years because of the fear of not being perfect enough, or the excuse of "no time."
The longer you delay on giving a try at what you want to do, the more expensive the 'sunk cost' is, in terms of your ability to reach a certain level of quality work, which in reality is maybe attainable after 1000 attempts.
3. Expensive in terms of your morale boost
Your company has a certain way of approaching a task. But in recent months, doing things the normal way has become taxing, and piling up frustrations instead of motivation.
Yes, a year ago the decision to approach that task that certain way felt right.
But a year later, approaching it that certain way may seem obsolete, and irrelevant.
The longer your team stays at approaching that particular task the common way—which has become frustrating—the more expensive the motivation of the team will be.
Takeaway: Think of everything having its own life cycles.
The trap of sunk cost has something to do with attachment, which when one is unable to let go, leads to self-sabotage.
"Self-sabotage is that we hold a strong attachment to a specific idea of ourselves. We do so because it is familiar. It’s comfortable." — Salman in Mourning Muscles.
Moving on may be hard especially if you are so attached to something
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What are the solutions to sunk cost?
There are no one-and-all solutions. Here are a few:
Being aware of when it's enough, when it's time to leave your old identity.
A different way to look at decisions is to consider the opportunities and losses of staying in the old way, and the opportunities and losses in transitioning to the new way.
Deal with it. Because sooner or later, they’ll catch up on you.
And this can mean writing that article your 15-year old self wished to read.
Nour Tagouri once posted an article on Met Gala's lack of Muslim representation.
According to her, that article is what her kid self needed = sunk cost = a gift to your former self..
According to #farinsighters, giving yourself space to grieve for letting go of that ‘dream’, and that ‘decision’ is one way to help you deal with the sunk cost.
As Marina and Nicole said in The Gen Twenty podcast, "If you get out of a sunk cost fallacy, consider yourself operating at a higher level of human reasoning."
"Call it lightening your burden, simplifying your life, making a better choice, turning over a new leaf, rising up, whatever you want."
..because uncomfortable growth always leads to new, better places.
What 'unseen' sunk cost is preventing you from moving forward in life? Or being the version you are today? Share with me!
Current Obsessions
P/s: The thing about this segment is that it helps me wrap up the week so I can make space for what’s next. It may not serve value, besides entertainment to you. But jotting them down publicly helps me appreciate this week, and not have a more expensive sunk cost one day down the road not jotting them down. Yup, I have attachments to what I consume 🤧
Signs from the universe my transitionary days are approaching:
Way Home—the BGM that made me feel better days are coming in Mark Tuan’s vlog. But at the time, I didn’t bother to get the music, until I heard the familiar tune after starting the butter radio, a BGM I got from Living Alone 👇🏼 vlog that also made me feel things.
Night Routine & Living Alone & Micro apartment in Japan vlogs, as well as Desk Setup vlogs. Instead of bingeing on Squid Game, I went on a marathon to watch this. Something about them that gives me a sense of "I'm prepping for this". But especially night routines, they’re a healing way to wrap up a long day.
Hyunjin’s twinnie; Bang Chan’s hiccup.
Serious Things
PR done well & a great way of localization: Ed Sheeran’s anime Japanese MV of Bad Habits.
“Words are vessels that writers fill with their thoughts, memories, and emotions, and ship off to whoever will have them. An author bottles their doubts, boxes their delights, and packages their pain, and then sells them like a shopkeeper. We are peddlers of our own personhood.” — Martin Vidal’s Why Writing Takes Courage
Recently Finished
How to spot high-conflict people before it’s too late— what I wished was taught in school
“Training is there to prepare you in times of pressure” - Ryan Holiday in Lewis Howes’ The School of Greatness podcast.
Hyunjin draws one artwork per day, as he disclosed in his SKZ Vlog. Takeaway: Maintaining your mastery of craft needs daily dedication and investment.
Elsewhere
If you missed out on last week’s letter, check it out! A fun one xx
& this is how I felt about dissecting Spirited Away.
From Kitty City
My first ever Flying Fox experience
Uploading the soonest that I can, is a sunk cost I've dealt with after years of delaying posting on the day.
The longer you delay posting something important/memorable, say an article on your travel experience if you're a writer like me due to perfectionism, the sunk cost will be more expensive because (1) your memory will be foggy; (2) it will take you longer to jog that memory; and (3) it won't be relevant, or you wouldn't be as excited writing about it after experiencing it.
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