What is a sunk cost?
- A sunk cost is a sum paid in the past that is no longer relevant to decisions about the future
- In a world where people change over time, anchoring decisions based on past efforts (that can’t be refunded) is a devil
Impact of sunk cost
- They make our future selves prisoners to our past and different selves.
- Its equivalent to a stranger making major life decisions for you.
Avoid sunk costs
- Goals made when you were a different person should be abandoned without mercy.
- This is a good strategy to minimise future regret
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