The Sunk Cost Fallacy

Mission Monday:

2 mins or less. A tiny thought or idea to help shift perspective and elevate your business and life — that doubles as a powerful message you can share with your clients to help them reach their goals.

Ever held onto something that's no longer serving you…

And it's keeping you stuck, but for some reason, you can't break free?

Why?

Because you've invested SO much time, energy, or money into it…

and admitting it was a mistake feels like a punch to the gut.

Welcome to the "Sunk Cost Fallacy."

And when you fall into the trap… you usually don’t realize until it’s too late.

Not too long ago, I allowed myself to get sucked into the crypto craze. It was fun. It was exciting. It was a great distraction.

And I made a LOT of money, until I didn’t. I ended up losing BIG in that Luna fiasco, where I watched a giant savings account (it was supposed to be pegged to the dollar) disappear before my eyes.

I made a stupid mistake. I felt foolish. And it’s hard for me to write about this.

I sunk SO much time and energy into crypto, so naturally, I decided to double down to dig myself out of the hole…

...instead of refocusing my energy and attention on something that I was actually GOOD at and that I truly cared about (my business).

Spoiler alert: it didn’t end well for me in crypto.

Our brains are hardwired to avoid loss, so when we've sunk our teeth into something, we're more likely to keep going rather than cut our losses.

But here's the kicker: Sunk costs are irretrievable.

You can't get them back, no matter how hard you try.

So, what can you do to escape this trap?

1) Recognize that your past investments don't determine your future choices.

Every day is a new day.

Use the info you’ve got to make the best decisions you can for your future.

Let go of any emotional attachments.

Reflect. Do the work.

Learn the lesson.

Shift your focus from what's already spent to what lies ahead.

And make your decision on if you want to continue on or not from a place of intention and alignment.

2) Give yourself permission to change your mind.

You’re not a flip-flopper. You’re not a failure.

You have new information, and you’re now making a more informed decision.

Winners adjust course when they need to.

3) Consider the opportunity cost.

This is a BIG one.

By holding onto something that's not working, you're preventing yourself from exploring better alternatives.

Life is too short to stay stuck in a trap.

Especially when you hold the key to unlock it.

Alicia

P.S. Is there anything in your life that you need to take a deeper look at? If so, sooner is always better than later.

P.S.S. Am I done with crypto? No way. I still own some and love what it stands for... but I'm certainly not going to make that same mistake twice.