Escaping The Sunken Cost Trap In Life

Life is an intricate journey, sometimes it feels like we're stuck in a never-ending game of "Choose Your Own Adventure."

We make choices, we have experiences, and we invest our time, energy, and emotions into various endeavors. But along this crazy path, we often stumble upon the dreaded sunken cost trap.

You know, that sneaky little mindset that shackles us to past decisions and stops us from living our best lives.

The Burden of Sunken Cost

Now, picture this: You're walking through the forest of life, humming a merry tune, when suddenly, you find yourself tangled in the vines of a sunken cost trap.

You look around and realize you've committed to things that no longer bring you joy or align with your true self. It could be a dead-end career, a toxic relationship that sucks the life out of you, or even clinging to outdated beliefs that hinder your personal growth.

The weight of these past decisions starts to loom over you like a rain cloud on a sunny day.

The more you invest in something, the harder it becomes to let go.

It's like trying to pull a sword out of a stone, except the sword is your dreams and the stone is your stubbornness.

If you succumb to the sunken cost trap, prepare yourself for the consequences that will reverberate into the future.

Stagnation will replace personal growth, opportunities will slip through your fingers like soap in the shower, and your dreams will remain as elusive as a unicorn on roller skates.

Your fear of abandoning past investments will put a roadblock on the highway of life, leading to a lifetime of regrets, unfulfilled aspirations, and a nagging feeling of being stuck in quicksand.

The Consequences

Let's take a moment to fully grasp the consequences of falling into the sunken cost fallacy.

Firstly, it's like pouring money down the drain while expecting it to magically turn into gold. You keep investing in ventures that are as likely to succeed as a penguin winning a marathon.

Secondly, it's like wearing cement shoes in a world of quicksand. It hinders your ability to adapt to changing circumstances and makes you as agile as a sloth on a coffee break.

Thirdly, it's like carrying around an emotional burden that weighs you down like a backpack full of rocks.

Regret, frustration, and stagnation become your constant companions, and they're terrible at telling jokes.

My Sunken Cost Experiences

Now, let me share a personal story to bring this point home.

There was a time when I thought I could do well in the stock market. My wife and I decided to invest in Sembcorp Marine, a shipbuilding industry specializing in offshore rigging, after knowing he also bought some shares in it.

Oil and gas were all the rage back then, and we trusted our friend’s judgement, so we were convinced we had found the golden ticket.

But alas, in 2014-2016, the oil price started to plummet like a bungee jumper without a bungee cord.

As the share price dipped below our buying price, we clung to the hope that it was just a temporary setback.

We convinced ourselves that oil prices were cyclical, and the company's fortunes would soon rise again.

While my friend wisely cut his losses (cost averaging) and exited the sinking ship, we held on, trapped in the treacherous jaws of the sunken cost fallacy.

Long story short, four years later, we finally sold our stock in Sembcorp Marine at a measly 10% of its original cost.

It was a painful lesson in lack of research, naive optimism, and of course, the sunken cost fallacy. Thankfully, it did not destroy us financially.

The experience taught me that the sunken cost fallacy can be a costly and painful mistake.

It's like holding onto a burning torch and refusing to let go, even when your fingers are turning into crispy chicken nuggets.

I totally get it. I still remember how reluctant I was to sell the stock at 60% of its price. The turmoil of losing money and the pain of admitting a mistake made.

And that fear of regretting if it bounces back later?

Ah, the cruel whispers of hindsight, tempting us with the illusion of what could have been.

But remember, life is not a game of "what ifs" but rather a journey of embracing the present and making the best choices based on the information available.

Eventually, the pain and regret of admitting our mistake and facing the loss were far greater than if we had cut our losses earlier.

But hey, life is all about learning, right?

Books Or No Books

So let me share another personal experience, this time involving books.

Ah, the joy of collecting books! I used to self-help books like they were going out of style.

My shelves were overflowing with colorful covers and promises of a better life.

But you know what else was overflowing?

Regret and the constant reminder of the money I had spent and also knowing it was all for show. I didn’t even read more than 10% percent of the books I bought.

It wasn't until later, when I decided to either give them away or exchange them at a book fair, that I saw the value in letting go.

Today, I've become a master of borrowing books from the library and reading e-books on my phone. It saves me space, money, and the occasional papercut.

Unless a book is truly life-changing to me, I prefer to borrow it first, read it, ponder over it, and then decide if it's worth a spot on my bookshelf.

I've applied this newfound wisdom to other areas of my life as well. Before buying anything online, I give it a trial run. I research, read reviews, and contemplate for a week (or two) before making a purchase.

And you know what?

Many times, I find that I don't really need it after all. Instead, I rediscover the treasures I already have, whether it's a book, a hobby, or a jar of pickles at the back of my fridge.

The point is, overcoming the sunken cost fallacy requires awareness, objectivity, and a willingness to let go.

It's like cleaning out your closet and finally saying goodbye to those clothes you thought you would wear when you lose weight.

How To Break Free From Sunken Cost Trap

Here's a handy guide to help you break free from the clutches of the sunken cost trap:

Awareness:

Recognize the existence of the sunken cost fallacy and its impact on decision-making processes.

Understand that the past investments cannot be recovered and that future decisions should be based on their inherent value.

Example: I came to a profound realization that I had been devoting an excessive amount of time each day to video gaming.

Unfortunately, I no longer found joy in it, and it had become a major distraction, consuming precious hours and diverting my focus from more meaningful endeavors.

It was during this self-reflection that I confronted a challenging truth—I was clinging to these games simply because I had invested a significant amount of money in them.

However, I recognized that continuing down this path no longer contributed to my happiness or personal fulfillment.

Evaluate objectively:

Step back and evaluate the current situation objectively, considering the potential benefits and drawbacks without being swayed by past investments.

Seek outside perspectives to gain a fresh viewpoint.

Example: My wife, Niki, had been stuck in the same job for years, despite feeling increasingly unhappy, overworked, and unfulfilled.

However, a turning point came when she experienced postnatal anxiety, which ultimately led her to leave the job.

When she felt ready to reenter the workforce, her previous employer extended an invitation for her to return.

While this offer might have provided comfort and familiarity, Niki chose to take a step back and take a clear-eyed look at her situation.

It was then that she recognized her untapped potential and realized that remaining in her current job was impeding her personal growth.

Motivated by this realization, she mustered the courage to send out emails to nearby institutions, inquiring if they had any available positions.

As luck would have it, she found a new opportunity that not only offered better compensation but also allowed her to reduce her commute, provided avenues for personal growth, and most importantly, made her significantly happier.

Reframe your mindset:

Shift your focus from the past to the future.

Embrace the idea that cutting losses and redirecting resources towards new opportunities can be empowering and liberating. Remember that progress often requires letting go of what no longer serves you.

Example:I found myself in a situation where the website I had been running ceased to be profitable (haha at best it was earning $400 monthly).

Instead of dwelling on the sunk costs and the countless hours I had invested, I decided to shift my perspective and view it as an exciting opportunity for growth.

I realized that this setback was a chance to pursue new ventures aligned with my true passions and aspirations.

Rather than lamenting the past, I chose to redirect my energy and any earnings from the website towards something with a higher potential for success.

That's when the idea of setting up a new website emerged, a venture that held promise and aligned with my goals and ambitions.

By embracing this fresh start, I opened doors to explore uncharted territories and pursue what I genuinely wanted to achieve.

Afterword

The sunken cost trap in life can hold us back from reaching our full potential.

But fear not friend, for with self-reflection, courage, and a dash of humor, you can break free from its grasp.

Prioritize your present well-being, embrace change, and align your actions with your authentic self.

It's like discovering a secret treasure map that leads you to a chest filled with joy, fulfillment, and possibly even a lifetime supply of chocolate.

Remember, life is too short to be weighed down by past decisions that no longer serve you.

It's like carrying a suitcase filled with rocks while attempting to climb Mount Everest—it's just not practical.

So, take a deep breath, summon your inner adventurer, and embark on a journey of self-discovery and liberation.

Let go of the sunken cost fallacy and give yourself permission to explore new horizons. Who knows?

You might stumble upon hidden talents, meet extraordinary people, or uncover passions you never knew existed.

It's like stumbling upon a magical land where unicorns frolic and rainbows are made of cotton candy.

Happy adventures!

Stay safe and give love.