One of the more obvious truisms in economics is the fact that past actions are irrelevant in terms of making choices about what one might do today.  These past decisions are called SUNK COST; being that they are sunk and cannot be reversed, recovered, or revised; what has happened cannot be changed, they are forever sunk.  Whereas the economic and logical truth of the irrelevance of sunk cost and past choices is irrefutable, our emotional attachment to our past and unwillingness to let go of it is often overwhelming.

For example, countless times I have advised and observed learners who seriously dislike accountancy in all its form. When I confront them about their distain and how they ought to pursue a different major and career, the restrain is usual, “I cannot change focus, I have been studying accountancy for three or four years.”  Invariably they graduate with their accountant degree and an adequate grade, and later perhaps a professional designation, but there never was an accountant inside.  They win the education/career battle but lost the education/career war.

Consider what following story by Jason Zweig, a Wall Street Journal investment columnist while he was working with psychologist Daniel Kahneman on writing his book Thinking, Fast and Slow. Zweig tells a story about a personality quirk of Kahneman’s that served him well:

Nothing amazed me more about Danny than his ability to detonate what we had just done,” Zweig wrote. He and Kahneman could work endlessly on a chapter, but: The next thing you know, Kahneman sends a version so utterly transformed that it is unrecognizable: It begins differently, it ends differently, it incorporates anecdotes and evidence you never would have thought of, it draws on research that you’ve never heard of. “When I asked Danny how he could start again as if we had never written an earlier draft,” Zweig continued, “he said the words I’ve never forgotten: ‘I have no sunk costs.’” Sunk costs—anchoring decisions to past efforts that can’t be refunded—are a devil in a world where people change over time. They make our future selves’ prisoners to our past, different, selves. It’s the equivalent of a stranger making major life decisions for you.*

What are your sunk costs that are hindering your progress?  What is it that is time to let go of and move on from?

Reflection Source: www.Smallercup.org

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*: The Psychology of Money: Timeless lessons on wealth, greed, and happiness by Morgan Housel