Your Life is a Sunk Cost

One of the biggest issues I have seen people have is a misunderstanding of the idea of sunk costs.

You've seen it - someone puts a massive amount of effort into something, and now they have to keep pursuing it, despite the fact that everyone around them sees how bad this thing is. They just keep thinking, "But I put so much effort into this! I can't throw it away now!"

You and I do the same thing on a daily basis. We pursue something that no longer makes sense, because we don't want to lose our investment. We all do it, and it's completely illogical.

This is similar to the way a lot of people (mis)understand probability. They've flipped a coin 100 times, and every single time it came up tails. So they imagine that this time is guaranteed to come up heads, because it just has to by now, right?

Wrong. Probability doesn't try to balance itself out over time. Only this flip, right now, matters. Probability doesn't care about the past.

We, on the other hand, are stuck in the past. We're putting ourselves back there, and imagining our course of action up through now. Maybe we're even afraid that if we change course now, it'll mean our past self was a moron. So we stick with something that no longer makes sense, all to please a past that is gone.

So here's the solution. Live in the present. In the present moment, look at where you are. Do not consider how much effort you have spent so far - that is a sunk cost, it's gone, and it has no relevance now. Honestly assess your current situation, and given what is true now, decide on a course for the future.

Maybe you bought a house. Maybe you spent $500,000 on that house. Maybe that house is now a pile of junk. Do not think about what the house was, or how much you spent; think about what it is now the case. And if it is a pile of junk, maybe you need to walk away from it, without looking back.

The past is a sunk cost. Now is the only relevant matter.