Sunk costs

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In economics, sunk costs are incurred costs that cannot be recovered. And during decision-making, these are treated as bygone and not considered when deciding whether to continue on a project.

Sometimes we do things, not because we want to do them, but because we had invested in and made decisions in these lines prior, that now we feel we have to.

This investment that we made is a sunk cost.

This is a beautiful concept I came across from the marketing legend Seth Godin.

Happiness comes from knowing that we don't have to do anything and that we have the freedom to do whatever we want.

Sunk cost is a gift. It's a gift that our past self gave our present self, thinking it'd be beneficial to us.

But our present self gets to decide if we want to accept it or not. Because we know better.

If we make decisions based on sunk costs, we get stuck deeper and deeper into doing something that we don't want to do.

Changing our minds is okay, as long as we don't go back on our decisions.

And once we stop being too hard on ourselves, we realise there is a difference.

(Originally written on 23 Apr 2022)

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