Why you should let go of the past

Do you think you make smart, rational decisions most of the time?

Chances are that even if you pride yourself on being rational most of the time, you still occasionally fall for the sunk cost fallacy.

At least I do, recently I felt compelled to continue a course even though they failed to deliver their promise. After all, I paid a solid €500,- and I already finished 4 of the 10 sessions, so I might as well finish, right?

This is the sunk fallacy in action, a thinking error.

“Individuals commit the sunk cost fallacy when they continue a behaviour or endeavour as a result of previously invested resources (time, money or effort).” 

— Arkes & Blumer.

The sunk cost fallacy is most dangerous when we have invested a lot of time, money, energy or love into something. The investment becomes a reason to carry on, even if we’re dealing with a lost cause.

The more we invest in something the harder it becomes to abandon it 

The misconception is that we base our decision on the future value of objects, investments and experiences. However, the (hard) truth is, our decisions are tainted by the emotional investments we accumulate, and the more we invest in something the harder it becomes to abandon it. 

If you take a moment, you can probably think of all sorts of situations where you make irrational decisions because of the sunk cost fallacy.

I’ve seen it happening in my previous company, people (including me) who fell prey to irrational decision making because of the emotional attachment to past investments and experiences.

“But we have invested so much time/money, if we stop now, it will all have been for nothing.”

Nowadays, in the work I do with my clients, I get to deal with the sunk cost fallacy on a much more frequent scale, and it’s rooted among various domains in our lives ranging from our relationships to our careers.

One of my clients who had been sacrificing his self-worth in a toxic relationship asked me for advice on how to make it work. After showing him the red-flags and clarifying how his emotional attachment pushed him to do things that made him unhappy, he kept reiterating

“I’ve invested so much energy in the relationship, it feels wrong to give up.”

This is the same anxiety that leads us to stay in unfulfilling jobs or pursue death-end career paths.

What’s done is done

There’s nothing you can do to regain money or time that’s lost. It's a death-end street that isn’t going to get your money/time back and will turn you, slowly but surely, into a miserable person.

This might be uncomfortable to face, but if you recognize any of these thought patterns, then you may as well want to ask yourself: 

What’s the #1 hard decision that I need to make that will save me from wasting any more time, energy or money?

Don't leave this decision up to randomness. Be specific on what you're going to decide, when you're going to do it, and where you're going to do it.

PS: If you enjoy my posts, feel free to join my inclusive facebook group Personal Mastery with Jord Cuiper where I share my perspectives, strategies and tools to help you win your battles and build a bigger and more meaningful future.  

Footnote:

If you have any questions in regards to this article, feel free to reach out to me. Furthermore, I’m just a guy sharing his perspective based on my own experiences, along with the studies and work of believable professionals in the industry. I fully expect that I have made a mistake somewhere in this article, in referencing an idea or tool to the wrong person or not at all. I’ve no intention of taking false credits, so if there’s anything not aligned regarding referencing, please email me at [email protected]