Tuesday, April 2, 2013

Sunk Costs

There are no opportunity costs in life, only sunk costs.

The opportunity cost of each moment of your life is infinite. You could win the lottery, you could get hit by a bus.  Opportunity cost is not a useful tool for life decisions.

Each moment of your life is a sunk cost. There is no way to recover your time. If you are rational, you ought not to let your past dictate your future.  It happened, its over and you can't re-do it.   Your past is a collection of sunk costs, and, as Led Zeppelin so aptly put it, "there's still time to change the road you're on."

I see this shit everyday. Kids think they're committed to the accounting career path, even though they don't enjoy it. They can't possible forgo the opportunity to ride out the guaranteed stability of the accounting career path.  You'll never succeed if you don't love what you do. Don't be a middle of the pack paper-pusher. Take a chance, do what you love, be successful.

The decision of 19-year-old you, to get a degree in whatever, should not dictate the remaining 60 years of your life.  It happened, its a sunk cost. The rational question is, how do you want to spend your days going forward?

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