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Sunk cost fallacy


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At the end of his fourth year in Engineering school, a brother I know made a decision many people around him could not understand: he dropped out.

To some, he was throwing away four years of his life. To him, he was cutting his losses.

While the course itself was five years long, he had fallen into circumstances that forced him to make a difficult decision. He eventually left Engineering and joined a short Aviation course instead. Many people viewed it as quitting. But from his perspective, it was choosing a different future before investing even more time into something that no longer aligned with where his life was headed.

So then, which is which? Quitting or cutting one’s losses?

In psychology, there is a phenomenon called the sunk cost fallacy, the tendency to continue investing in something simply because of what we have already invested into it. It could be an investment of money, time, energy, effort, or even emotions, which then makes one think:

“I spent all that on this education, I can’t quit now.”

Even when the thing, person, or situation no longer serves them.

This is evident in many different aspects of our lives.

You start a business. You pour in your sweat, tears, money, and heart into it. You sacrifice your time and energy to fully concentrate on making it work. Two years in, the business is barely paying off. Your costs are high and the profit margins are painfully low. But you have already spent two whole years trying to make this dream a reality. So even when the books clearly show the business is not working, you continue investing in it with the hope that someday it will finally pick up.

It is the same with long-term relationships. It becomes harder to leave a toxic relationship because you have already been someone’s spouse for over a decade, and leaving begins to feel like a waste of your prime years. So you hold on. You justify the decision with thoughts like: “He is the father of my children.” “We own property together.” “Maybe things will get better once we have children.” “She knows me too well. I cannot start all over again with someone else.”

Not necessarily because things are improving, but because as human beings, we are naturally averse to loss.

Even in our day-to-day lives, we see the sunk cost fallacy at play. You book a plane ticket to attend a major function in another town. The function gets cancelled unexpectedly. Even though there is no longer any real reason for you to travel, you still feel compelled to use the ticket so that it “doesn’t go to waste,” even if the trip will now cost you more time, energy, and money. Even when the math is not mathing.

There is also the shame and guilt that increases as the sunk cost increases. It becomes difficult to admit that perhaps we were mistaken, made poor decisions, or ignored advice we were given. And social pressure does not make it any easier. As our people commonly say: “Watu watasema nini?” (What will people say?)

Again, as our people say: “Maji ukiyavulia nguo, yaogee.” (Once you have already committed yourself to something, you might as well continue with it.)

And so we continue bathing in that water even when we are slowly drowning in it.

As much as optimism is a beautiful trait to have, there is a thin line between optimism and delusion.

As such, one should take a moment to reflect on the matter at hand and ask: Is this resilience, or am I simply afraid to let go?

How then can one know when it is time to move on?

  1. When the future cost is bigger than the past cost.

One way of figuring this out is by asking yourself: “If I had not already invested anything into this, would I still choose it today?”

If I was not already in this job, this course, this relationship, or this situation, would I still willingly choose it?

If the answer is no, then perhaps you are no longer holding onto it because it is right for you, but because you have already invested too much into it.

  1. When effort is no longer changing outcomes.

Sometimes we convince ourselves that if we just keep trying harder and harder, things will eventually fall into place. And sometimes they do.

But sometimes they do not.

If you consistently put in effort and nothing changes, if you repeatedly knock on a door that remains firmly closed, then perhaps it is time to redirect your energy elsewhere.

Persistence is admirable, but not every closed door is meant to become an entrance.

  1. When your only reason for staying is: “I have already come this far.”

As painful as it is to watch something you poured your heart into fail, let history not become the only reason you continue fighting for something.

Your future matters too.

  1. When hope is no longer based on evidence.

It is good to be hopeful and optimistic. But let that hope be rooted in actual progress, not merely in the thought: “Maybe it will change because I need it to.”

There is a difference between hope grounded in reality and hope grounded in desperation.

  1. When you are more afraid of leaving than of staying.

One should ask themselves: “Am I staying because I genuinely still see value in this, or simply because leaving something familiar feels too frightening?”

Sometimes fear disguises itself as loyalty.

Letting go does not mean your investment was meaningless or pointless. It simply means accepting that it no longer serves your future self.

The cost has already been paid whether you stay or leave. What remains is deciding whether you will continue paying for something that no longer serves you.

And who knows what doors will open up after letting go?

I recently met a friend who had interned and volunteered at a workplace for nearly three years. She genuinely loved the place. She learned the system well, connected with many people there, and invested herself emotionally and physically into the organization. She spent a great deal of her time, energy, and even money there.

But despite all that, she was never absorbed into the company.

The disappointment hit her very hard. Even months after leaving, she still kept hoping for another opportunity to return. But eventually, she decided to cut her losses and look elsewhere.

Not long after, she landed a brilliant international opportunity that aligned far better with her passion, personality, values, and long-term goals than the previous workplace ever did.

As for the brother who left engineering for aviation, he says he does not regret his decision. In fact, his experience in engineering school ended up helping him tremendously in aviation. He found himself thinking differently from many of his peers. His reasoning skills, ability to think outside the box, and approach to problem-solving helped him rise quickly within his workplace.

And so, perhaps it is not always so terrible to cut one’s losses.

The sunk costs have already sunk. There is no way to recover the past.

But the future is still negotiable.

***

Assalam aleykum warahmatullah wabarakatuh Alhamdulilah my blog ‘Strokes of my pen’ has been nominated for the 3rd time by Bloggers Association of Kenya under ‘Creative Writing Category’.I’m kindly requesting for your votes.

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