The Power of Loss

It's exciting when we get something new. But, it hurts more to lose something we've already obtained. As humans, we're wired to be loss-averse. That is, after we "own" something, giving it up feels like a loss, and that's a bad feeling--even if we don't particularly need or care for whatever it is we've lost.

It's called the "endowment effect" and it makes every day transactions painful for us. Think about how many exchanges you make in a day... Paying for a cup of coffee, trading lunch with a friend, losing time to rush hour traffic, compromising in conversation, having an item go missing, etc. Whatever we end up giving up represents a loss to us, and it hurts. In some cases, we're getting something in return, but it's usually easy to feel like the other party is getting a better deal. You know what though? The other party in the exchange probably feels the same way because they're losing something too in the exchange.

That's why it's so important to look for win/win situations when you're dealing with any kind of exchanges. For example, donating your hard-earned money to charity is a definite loss, but perhaps the feeling of doing good and giving back is enough of a reward to help offset that pain. While we're naturally wired to be more concerned about losses over gains, luckily we can choose to change how we think about these things. The next time you feel the pain of loss, ask yourself what you're gaining, and you might feel a little bit better.

It's unavoidable. We're all going to experience loss, probably frequently, and it's going to hurt! But we can lessen the pain. When you give something up, look for the silver lining and focus instead on what you'll gain from the exchange. It might be something physical, a feeling, or just life experience... However, looking at things in terms of "gains" rather than "losses" might help dull the pain of your loss!