Last year, I sat in a leadership talk where the speaker told us to ignore the sunk cost and choose what is better or best. It struck a chord in me, and that’s why this is going up on my blog.
Let me first give you an idea about sunk cost so you aren’t a lost puppy. A sunk cost is the money that you have spent but can’t recover it. This is due to the lack of efficiency in the decision taken for the long run. Read on more to understand that sunk costs aren’t necessarily evil in your life.
Many a time, I feel like I have decided on things after my parents invested money in something else. While deciding which college I should join for my under graduation, there was a sunk cost involved. I got into VIT (Vellore Institute of Technology) and paid the admission fee for the same. The counseling for CEG (College of Engineering Guindy) was almost three weeks after confirming my admission in VIT. However, I wanted to get into CEG as it was ranked higher and was inside the city. My parents knew that we wouldn’t get the entire admission fee refunded from VIT, but they still let me join CEG when I got my admission there. That is a sunk cost I don’t regret in my life. Had I not studied in CEG, I wouldn’t have been able to get the best group of friends who I can still count on if I need anything and I wouldn’t have had the exposure to management which made me do an MBA.
Now, the biggest sunk fund incurred in my life would be me shifting from engineering to management. That is a large chunk of money wasted into engineering and all for nothing. Well, that is what people would say. However, I took a well-informed decision, and it was after a lot of research. I knew that there was a sunk cost involved, but CEG only gave me a platform to explore my passion and showcase my skills in a multitude of areas. I wouldn’t have loved the idea of management if I didn’t have the opportunity to experience it during my stint as the President of The Guindy Times. So, while I’m doing an MBA right now, I believe I’m on the right track where I’m learning more about the world.
In life, everything happens for a reason. At a given situation, you might have to make a decision, but that doesn’t mean that you have to stick to it forever. If you see a better opportunity passing your way, don’t be afraid to grab it. It is good to think of the cost that you will have to face because earning money isn’t an easy task. However, some decisions that you take will help you better in the long run.
This is a corporate lesson, as well. Don’t hesitate to take a decision that comes along that would be better for your organization in the future, especially if it is the sunk cost that is holding you back. Explain to the top management why and how you think it would benefit them in the future.
Life lesson #101 – Don’t be afraid to make decisions if you know that it will be better in the long run. Let go of the sunk cost!
World of Jeana 