How Sunk Costs Keep You Stuck

Do you keep doing what you've been doing because of what it had cost to get you there?

A friend was telling me how much they disliked their career and the particular organization they were with. It wasn't just the role or the company, but it was also the industry. They were disengaged and going through the motions of their job and only working for the weekend.

This was an ongoing conversation every time we saw each other.

Even though I am in career development, I don't give unsolicited advice but after weeks of the same conversation, I finally asked with curiosity, what was keeping them there.

They had invested a lot of money and time into their education and didn't want that to "go to waste."

Understandable given that they were in school for 8 years and were thousands of dollars in debt.

Sunk cost fallacy.

Oxford Dictionary defines this as, "the phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial."

How many of us get stuck in this?

This happens with entrepreneurs and businesses - sticking with a service or product that is no longer working because of the money and time already invested.

With investments.

In relationships.

The list goes on.

Overcoming the Sunk Cost Fallacy

Step out of the emotion, be objective, and stick to the facts. Is your career or business working for you? What is it costing you to keep going the way you are going? Not what did it cost you but what is it costing. You may discover the costs are higher, ie. your well-being, your happiness, etc.

Shift your perspective. Look at the bigger picture and reconnect to your vision, this can help you to focus forward.

Seek advice. Ask a trusted mentor or advisor to help you make a decision.

The one potentially good thing about the sunk cost fallacy is that it can also help you to make different decisions in terms of your time and money investments in the future. For instance, if you are thinking about a career change and considering further education, you could take different actions to see if that field is truly a good fit.

Whether you are staying the course in your job or your business because of the time, money, and resources you have already invested, take some time to reflect on whether that is serving your future self.