Sunk Costs

 

They’re all around us. 

The gym wants its money every month, and you will pay it even if you haven’t gone for 3 months.

The car needs another repair after you’ve already dumped more than it’s worth.

The movie you paid to see is terrible.

 

 

http://youtu.be/H2eOkOxKHdE

The magic of the sunk cost is that when you can identify it, you will be able to make a decision more rationally.

Whenever we cough up the money for a recurring sunk cost, we are telling ourselves a story. It may come in many different forms but the gist of it is this: 

“This is an investment, and if I stick with it a little longer it’s going to pay off”

It’s an emotional thing. We don’t want to feel stupid and so we keep on finding reasons to keep using our resources.

Time to say goodbye to your “investments”.