At some point in our lives we have all invested time or money into something we later regret, ruing the decision to pursue it even when we knew we shouldn’t. Why do we do this? It’s a question we ask ourselves every time it happens, yet few of us put a stop to it. I like to refer to this phenomenon as the sunk cost fallacy.
In essence, the sunk cost fallacy is the false belief that we have to see something through if we’ve invested time or money into it, as if bound by a subconscious agreement we’ve made with ourselves. There are endless examples of it in our everyday lives such as forcing ourselves to finish a book we’re not enjoying, pursuing a business idea we’re no longer passionate about or keeping our money in an investment that isn’t paying off even though we know the money is gone. For some reason, we’re scared to cut our losses, but ironically by not doing so, we waste even more time or money than we otherwise would.
One of the most prominent examples of the sunk cost fallacy is our careers. I’ve spoken with countless people who are feel stuck in a job they don’t enjoy or they’ve done it for so long that they don’t want to start fresh, so they accept mediocrity or worse until they retire. Time after time I hear them say “it’s just to pay the bills” or “it is serving my goals, so I can live with it”. We like to think that success is just around the corner if we continue on our current path and that if we deviate, we’ll lose all of that investment — but that isn’t true.
One of the life changing moments for me which helped evict the sunk cost fallacy from my life forever was this clip from Naval Ravikant on the Joe Rogan podcast.
This snippet changes my perspective on how I look at how I spend my time and how I aim to achieve my goals. I no longer feel duty-bound to pursue something that no longer serves my wider ambition, and neither should you. Next time you find yourself pushing forward with something that no longer aligns with your passion and goals, remind yourself of these words:
“Sometimes we must go back down the mountain to find the path that will lead us to the top.”
All notes are from the book I am currently reading: Indistractable by Nir Eyal.
- On controlling outcomes: “When it comes to our time, we should stop worrying about the outcomes we can’t control and instead focus on the inputs that we can.”
- On being focused: “It’s fine to watch a video, scroll social media, day dream or take a nap, as long as that is what you planned on doing… if you’re not spending your time on what you planned on (committed to) doing, then you’re off-track.”
- On our life domains: “Our life has three domains — ourselves, relationships and work. Whilst it may seem selfish to put ourselves first, it is important to remember that unless you look after yourself both phsycially and mentally, both of the other domains will suffer.”
“Not showing up guarantees failure.” — Nir Eyal