What is the SUNK COST FALLACY and how has it AFFECTED our lives?
Updated: Jul 22, 2019
Ever purchased new year clothing, only to realize that the cutting looks horrendous on you? Did you still decide to wear it out during the New Year because you've already paid for it? If you did, you had just been subject to the SUNK COST FALLACY.
The term SUNK COST refers to the investment that you have already put in some time ago that cannot be recovered, and THEORETICALLY, it should not affect future decision-making processes. Why? Take a look at the example below.
From a business perspective: You bought a piece of property for $10mil. This property is suppose to generate $1mil of income every year for you. However, after purchasing, you realize that you are LOSING $1mil every year instead.
After 5 years of losses, do you:
(1) sell this property away or
(2) keep holding it?
Theoretically, you should neglect your initial outlay of $10mil and just sell the property (assuming no other expectations of it). In this case, it sounds simple doesn't it? However, in our daily lives, we are subject to SUNK COSTS as well but we might not have noticed it. And not noticing it might just be our downfall. Here are a few aspects of our lives where we might be subject to the SUNK COST FALLACY.
Just like the example on top, if you have purchased clothes, food, electronic gadgets, accessories, furniture, household appliances etc, but it did not turn out as expected, are you still using them because money was spent on it?
If your clothes do not fit, stop wearing them! If the food you ordered tastes horrible, stop eating it! If your phone may explode into flames any moment, stop using it! It is just as simple as that, you do not have to endure any additional discomfort for previous bad choices.
What we forgo here, is only our initial investment of CASH. At Outreach, we provide support to people with difficulties letting go of material possessions that do not serve any purposes anymore, due to fear, habits, or sentiments sake. If you are not able to let go of material possessions, the next few aspects might prove to be even more difficult.
We may have studied for years, going through specialized courses in Polytechnic, University and so on. However, at some point in our careers, we may start to ask ourselves, why am I doing this?
Still, most of us choose to stay where we are, be it the same company, same industry, or holding the same status/rank, as we have invested so much time, effort and money into getting where we are. But how many of us truly love what we are doing? Are you working for the sake of your dreams, or for sake of your employers' dreams?
Your career path is not set in stone. At Outreach, we understand your career goals and assist in clearing the fog for you to see other paths available out there. If you are suffering at your job, know that you always have a choice. Because you have invested lots of time and effort, thinking of restarting is scary, but working with no purpose is worse. Every year, the company's expectations from you only get higher, if you are not able to keep up, you're condemned, or even worse, fired.
Ask yourself, are you progressing in the right direction? If you're neither progressing nor facing the right direction, then you're just suffering for no reason isn't it? Every additional day you stay on will increase your SUNK COST. How long will you take to get out of this fallacy?
In our lives, people come and go. That's how it should always be. However, we know that not all relationships are that simple. Over the years, we may have invested time, effort, money and emotions to nurture a relationship.
But at some point of time, we realize that the feeling isn't right any more. Ideals start to mis-align, paths start to diverge as each party starts to grow in different directions. We have heard so much about learning how to hold on, and so that's what we do. But a relationship should be mutual. If one party does not reciprocate, its not a healthy relationship any more.
One party might be neglected, taken for granted, or even abused and cheated on. How much suffering needs to be endured before we are willing to let go of a relationship? Communication is key, not sheer perseverance, or obstinance. At initial signs of discord, start talking it over and try resolving it. When there are no peaceful resolutions to conflicts, will you be subject to the SUNK COST FALLACY? At Outreach, we understand the importance of social relationships, but we emphasize on keeping the healthy ones. We provide clarity to people who are torn between conflicting internal thoughts and assist you in making tough decisions without regret.
The above are just 3 aspects that are usually heavily invested in. Your life is excellent if everything is smooth sailing and these 3 aspects are in harmony. You live with no regrets in any decisions made in life and you treasure all that you have.
However, for a portion of us, we realize that we are not living this ideal lifestyle. We might have noticed the SUNK COSTS in our lives but we choose not to make any changes and tolerate any discontent. It takes courage to change and this is what we lack. We rather tolerate discomfort than risk losing everything. But tolerating may bring negative impacts to our emotional and mental health in the long run.
The story of our lives are different for each and every one of us. We make different choices leading us to different routes in life. At Outreach, we are here to give you insight and clarity into your life. With methods such as hypnotherapy to find your direction in life and clear any emotional burdens from the past, as well as the KonMari Method to help you to clear material possessions that does not serve you any longer, we are well equipped to provide you with assistance in the changing phases of your life.
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