Maybe it’s time to let go
One of the hardest decisions to make in life is whether you should continue to invest in something or cut your losses. We face this in our friendships, marriages, investments, entrepreneurship, and in our careers.
When you try to get help with making your decision, you receive a wide range of conflicting advice.
- Never stop fighting, never give up.
- Yet, you’ll never be happy if you can’t learn how to move on.
- Nothing replaces persistence.
- Yet, smart people know when to quit.
- When you get knocked down, get right back up.
- Yet, learn from your mistakes and move on to greener pastures.
- You’ve got to know when to hold ’em. Know when to fold ‘em.
When you miss a great new opportunity because you are focused on a failing opportunity, you often don’t get a second chance. Unfortunately, human beings have such a strong aversion to loss that we tend to stay in a bad situation longer than we should. The research isn’t straightforward, but we do tend to weight losses up to 5x more than gains.
“Sometimes we stare so long at a door that is closing that we see too late the one that is open”
– Alexander Graham Bell
This is directly related to the fallacy of sunk costs as well. This occurs when you make a decision based on costs and investment that have already been made and cannot be recovered, instead of clearly looking forward at the true opportunity and value associated with making a new decision moving forward.
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It’s why we stay in bad relationships, bad jobs, and continue to live with the consequences of bad decisions. We have invested so much time and money in something that we often don’t recognize when the door is closing. We refuse to let go and accept that we should move on.
This is the biggest tragedy of refusing to let go of sunk costs:
You sacrifice bigger and better opportunities.
Timing is important. A great opportunity, that “open door,” won’t wait around until you finally decide to give up on that closing door and turn away from a failed opportunity.
A spreadsheet can be your best friend
I’ve found that it is challenging to objectively evaluate and compare complex alternatives that have a significant emotional component. Career decisions certainly fall under that category. Rather than let myself be swayed by the sunk cost fallacy, saliency of certain issues, and other emotional factors, I create a spreadsheet that lets me compare my choices using a list of factors that are important to me.
This reduces the impact of loss aversion and I can refuse to let the loss be weighted more than a new gain. Sometimes seeing the two “doors” in black and white, side by side, will make it clear that you should let one of those doors close so that you can confidently walk through the other.
It also helps to discuss the options with a trusted friend or mentor. They have a much more objective viewpoint, of course, and if they truly are someone you trust, they have your best interests at heart.
There have been times when I was trying to decide if I should keep investing in a challenging situation, and I reached out to a trusted advisor. I explained everything to him, he asked a few more questions and thought for a few minutes, and then he said, “You’re done there.” It was clear to him what was going on and what my chances were for turning things around. I was too close to the situation to see that as clearly as he could.
Once he said that, it tipped the balance in my head. I decided to move on to a better opportunity.
Bigger and better things!
Firmly close those doors that are no longer real opportunities. In your heart, you know which doors should be closed, but you’ve probably wanted to keep your options open.
That distraction prevents you from clearly seeing the open doors around you. Accept when something is done, make peace with it, and move on. It’s amazing how much more energy and attention you can give a new opportunity once you truly clear your mind of the old.
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