If you really wish to become wealthy and prosperous, you have to be willing to acknowledge, recognise and receive the implications of sunk costs when an investment does not benefit you.
Sunk costs are costs that are irrecoverable. It’s something that you have already spent and that you won’t get back, regardless of future outcomes. It’s like that meal you ordered in the restaurant, that is far too large and you become full after eating half of it, but you are reluctant to stop eating it. You feel compelled to eat it anyway so that it isn’t wasted. Not finishing food that you’ve paid a lot of money for often feels like you’ve wasted money and food, and waste is something we’re told to avoid. That's the key reason why most of us put on weight.
The unwillingness to receive sunk costs is the place where you have no true choice.
Suppose you have booked a non-refundable holiday package. However, some emergency happens at your work and you simply can not go on the trip anymore. Do you regret the fact that you had already paid for the trip in advance and you can't get your money back? The point is that the money is already gone. So, could you just forget about what you paid for it? If the answer is no, then you are suffering from commitment to sunk costs. You are trapped by the sunk cost dilemma when you are concerned with what you “paid” for something rather than what you will get out of it in the future.
Most of us fall into the sunk cost trap when we have a judgment that it is wrong and terrible to waste the time or money we have already spent, instead of cutting our losses and making a different choice that would give us the best outcome going forward. We don't like to admit to ourselves that we have wasted money or resources on our previous choice. Admitting to ourselves that the choice we made was not rewarding is viewed as admitting failure. As a result, we tend to hang on to the choice we've made, or even invest additional resources in a futile attempt to make our initial choice seem worthwhile.
So with every point of view and judgment we have about sunk costs, every “wrongness” that we believe, we are limiting our ability to receive abundantly and infinitely. If we are willing to lose the money that we 've already paid, we open the door to all that is possible. Sadly, most of us haven’t learned to receive sunk costs with ease. Instead, we yield to a strong psychological drive to hang on to what we’ve paid for, which then causes major stress and unhappiness in the process.
When you have no point of view or judgment about sunk costs, everything is a possibility. How much more can you receive if you hold onto nothing and allow everything to move in and out of your life with ease? Rather than figuring out how you lose, you could go into possibilities. When you have a judgment about not wanting to lose the sunk cost, ask, “What possibilities do I have here, what choices do I have?
Different possibilities can exist when you're willing to lose the money that you refuse to lose or you think you can't lose. When you have no point of view about anything, that is the place from which you can start generation - because you don’t have a point of view. You can ask “What else is possible?” If the investment is not working, then ask: “Do we need to change this or do we need to end this?”
The way most of us behave when we invest in the stock market is a good example of the sunk cost trap in action. As an example, let's say we buy $100,000 worth of Company X’s stock that we think will produce good profit, but within a few daysits value has dropped by 30% due to unforeseen business problems. Instead of selling the stock and putting that $70,000 into a different stock that is likely to rise in value, we tend to hold on to Company X’s stock, which in the coming months becomes worthless. Some people will not sell a poorly performed stock that they have invested in because they don't wantto be seen as making a wrong choice.
This unwillingness to receive sunk costs not only slows down our investment efforts, but is one which can make us waste our whole lives by sticking with something when we’d be better off cutting our losses and creating different possibilities. When we are trying to recover our investment by holding onto it because we cannot accept it is no longer working, we will not see new possibilities to choose something that is different and more generative.
If you refuse to receive sunk costs with ease, you will hold on to what you have to try and make something occur that you know is not occurring. You will deny what you know forever to make it right that you spent the money. Just because you spent the money doesn’t mean it’s right. Do you say “It's OK, It will work out.”? You have to be willing to scrap something in a heartbeat if it’s not working no matter how much you spend. Ask “Is it working for me? No? OK. Bye!” And do it right now, not later.