The Decision Keeping You Stuck

Most people think quitting means failure.

But the truth is, clinging to something just because you’ve already invested in it can quietly drain your time, money, and energy.

In this Sunday Session, I’m sharing how the sunk cost fallacy tricks us into staying stuck — and how to spot it, stop it, and free yourself to make better decisions.

So tune in, reflect, and give yourself permission to walk away from what’s no longer serving you.

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Transcript

00:00 Hello there, and welcome back to another episode of Sunday Sessions with me, Nick Peninsky. On today's show, we are going to be talking about the sunk cost fallacy.
00:11 Now let me bring this to life for you. Have you ever sat in the cinema halfway through a film and thought, this is awful, but you've stayed anyway because you've already bought the ticket?
00:22 Or have you ever forced yourself to finish a book you weren't enjoying just because you'd already got halfway through it?
00:32 Or have you kept turning up to a membership or a networking group that isn't getting you any leads but because you've paid for it, you don't want to waste the money, so you keep showing up?
00:40 Well, if you've said yes to any of these, you're normal, and you have a experience the sunk cost fallacy. This is a psychological bias that tricks us into throwing more time, money, or energy into something just because we've already invested in it.
00:58 Now, there's three examples that I've shared immediately. They're about the cinema, the book, the networking group. Those are all examples from my past life.
01:08 So I can tell you, hand on heart, I have fallen for the sunk cost fallacy. I have fallen prey to the sunk cost fallacy.
01:17 So in the terms of a cinema, I was watching once upon a time in Hollywood. Oh my god, I hated it.
01:24 After half an hour, I remember turning to my friend like, when does this get good? And I wanted to leave, but we'd already invested in our tickets.
01:33 So therefore, I decided to stay. Now Fair Play, the last, I don't know, 10, 15, 20 minutes or so, was amazing, but that first two hours is ugh, that was hard to watch.
01:47 And in terms of the books, why, I do this all the time. Nowadays, I have a bit of a rule.
01:52 If I get to about 10% and I'm not enjoying the book, then I put it down. Um, but if I've somehow managed to go past that for whatever reason, then I'll start skimming and just try and get through the book.
02:04 And in terms of the n- networking, yes, I have definitely joined a membership before it was called 4N. Um, and yeah, it just didn't get me any leads.
02:13 It was just a constant waste of time to keep showing up. So, yeah, I have fallen prey to the sunk cost fallacy.
02:21 And I am a- Imagine, as a normal human being, so have you. Now, the sunk cost fallacy that is basically, it's continuing with the decision because of past investment, even when that past investment is no longer saving us.
02:34 It feels rational, right? I have invested- in something that I'm gonna see it free to the end. But it's actually emotional.
02:41 You know, our brains hate wasting effort, and there are three reasons why we fall for it. There are three reasons why we fall for the sunk cost fallacy.
02:52 Now, first, as I say, is that- fear of loss or wasting what we've already spent. We don't want to feel like we have, you know, wasted our money, wasted our time, wasted our effort.
03:03 So, that sunk cost fallacy works against us. Now, in terms of the ego, that's the second reason- why we fall for the sunk cost fallacy.
03:11 We have to admit that something didn't work, that we, we have felt, uh, we have failed, that it feels like a failure.
03:19 So admitting that something didn't work, that is not something we're always comfortable with. We want to see things for each other.
03:25 Yeah, right. And there's also the third reason why we fall for the sunk cost fallacy is hope. We have this, yeah, we have this belief that maybe it'll turn around soon, right?
03:36 Even though there is no evidence whatsoever that it will. But we have this hope. As I say, maybe it'll turn around soon.
03:44 I think, you know, there's that cartoon image you've probably seen on Facebook or LinkedIn or whatever. And there's a minor underground and he's digging away and he gives up just before he's about to get to that diamond, right?
03:58 So, that's the kind of thing that we are working against. We see that image and we think, oh, that'll never be me.
04:05 I would keep going and that's where we end up falling again for the sun-cost fallacy.
04:11 Now sometimes the sunk cost fallacy can actually be useful, right? It can help us push through that short-term discomfort to get that long-term reward.
04:21 So if we've invested in a course to learn a skill, or we want to finish some sort of big project, and we are not seeing the progress that we want initially, falling prey to the sunk cost fallacy, well, I better see it through anyway, can actually be really useful, because in the long-term, that skill
04:39 is will be really useful, but equally, uhm, the rest of what we are learning, what we are doing, it gets better, and we do get that long-term reward.
04:49 It also helps us build discipline and resilience, but only if the outcome is still genuinely valuable, right? So, turning up when you're supposed to, doing what you are supposed to do, that's discipline, and sometimes, you know, the sunk cost fallacy can help us along with that, right?
05:06 So, it is, well, the sunk cost fallacy can be useful, but most of the time, the sunk cost fallacy is not useful.
05:13 It ties you to things that drain your time, your money, and energy. If things, yeah, like the three examples I gave you right from the start, the cinema, the book, the membership, just because you've invested in something doesn't mean that you should continue with it.
05:27 just because you've invested with it, right? If it's not serving you, then it is a good idea to cut the head off the snake and get back to normal.
05:36 And it also, here's, here's the real killer, it blocks better opportunities because you've already committed to- something. You are continuing down that path.
05:46 But that can mean that you do not then spend that time, energy, and effort on something else, right? So if you, for example, are reading the book and you are not enjoying the book, but you then, therefore, you are not spending that time doing- other things.
06:00 And that blocks that better opportunity if sunk-cost fallacy is working against you. And then I think the big example will be, um, you know, like gamblers, right?
06:10 They throw good money after bad. They investing more. It doesn't guarantee that it will suddenly- work. So, you know, I give the example of, um, gamblers, you know, they are- they- they- they are losing money at a casino or whatever, so they think, oh, well, I- I better get my winnings back.
06:28 Um, that doesn't guarantee that it's going to work. And also, if you've, you know, invested in a business or you've invested in some stocks and shares or whatever, where you want to, you know, you want- you don't want to lose what you've already invested, so you invest more to try and get your winnings
06:45 back, you know, your investment back. And that's when there's some- cost fallacy really works against you. So, considering all this, how do we guard against it?
06:54 How do we make sure that we do not fall prey to the sunk cost fallacy? Well, use sunk costs as history, not as re- citizens for future decisions.
07:06 So, you can ask yourself, if I hadn't already spent money or time on this, would I start it again today?
07:12 Would I keep going today? Would I, would I keep making the same decisions? You know, remove that emotion of the spent s- time spent money?
07:22 Would is this a good idea to continue? And next, you want to think to yourself about check points or exit criteria before committing long term, you know?
07:32 I, I did a podcast recently or it's coming. I'm not sure. Or of the release schedule, but about B&I, right?
07:39 And I talk about the fact that in B&I, you know, you sign up for a year, but just because you've signed up for a year doesn't mean that you necessarily have to show up for a year.
07:49 If B&I isn't working for you after three, four, five, six months. Whatever. That doesn't mean that you have to continue.
07:55 It might be that that is a waste of your time, and it might build B, that B&I doesn't work for you.
07:59 So, you know, when you sign up for something, set yourself a checkpoint. One, two, three, four, five, six months, whatever it is.
08:08 Uh, for that kind of thing, that can be when you have an exit criteria. It's the same with a book, or a movie, or whatever it is that you invest your time, your money, your effort in.
08:20 And then, you might also want to consider getting an external perspective, right? A mentor, a peer, a coach, a family, a friend.
08:28 Again, break that emotional attachment. Share the situation with them. What would you do in my position? Get some external perspective to break that emotional attachment.
08:52 can we use the Sunkos? Thank you. Umm, we can cut underperforming memberships, tools, cheap clients that are consuming our energy.
08:52 Anything that we've invested time and effort in, there isn't working for us. Now we know about the Sunkos fallacy. It's time to get rid of it, right?
09:01 I mean, anything that isn't serving us, isn't giving us a great return on investment, cut the emotion, get that external perspective, and yeah, move on with your life.
09:10 Go and do something else. And in your marketing, you can use this to your, uh, uhh, uhh, advantage, you can use small paid commitments, like a paid trial, a deposit, a low product, a low ticket product.
09:23 People value things that they've invested in, and then more likely to follow through on them, right? So these are really useful to get.
09:31 People to join your worlds. And this turns, and, and, you know, this is a, not a way of manipulating people, because you have a great service and you are able to give that service, but you may need to help people to make that decision to work with you, right?
09:47 When, you know, w we've been through this, um, before people are naturally inclined to stay where they are, because that is their comfort zone, and you need to help them step out of their comfort zone.
09:57 And that's how you can do this with the sunk cost fallacy. It turns from a trap into a motivator. So, yeah, let me recap this whole episode for you.
10:08 Don't let sunk costs steer your business and your life decisions. Focus on future potential, not past investment. If you think that something's gonna be better for you in the long run.
10:19 You know, sit down, work it out. If a different path is gonna be better for you, then make that decision to cut your losses.
10:27 So, just because you've started something, it doesn't mean you have to finish it. Your time is too valuable to spend on dead ends.
10:35 So hopefully this episode has been useful for you. Thank you for taking the time to listen along. And as ever, embrace the change.
10:42 Because how we change is how we grow.