Consider future costs

Everything you do is a trade-off.

When you are lucky, it’s between two options. More often than not, it involves multiple options, some of which are equally appealing.

If you go to the movie, you cannot stay home with your family or spend time reading a book. If you buy a new car, you’ll have to refrain from other big expenses for a while. If you accept that offer, you won’t be able to pursue your dream of being a freelancer or a full-time YouTuber.

It’s self-evident, I know. And yet, there are two things about trade-offs that is worth keeping in mind and reminding when appropriate.

First of all, the nature of a trade-off is that you leave some stuff behind. Regrets, while natural, are kind of pointless, as you know you would still be missing something, one of the options, would you have made another choice. It’s intrinsic to the idea of decision-making.

Nonetheless, and this is point number two, that does not mean you cannot change your mind. Even if the other options are no longer available, the fact you invested (time, energy, commitment) into your choice, does not mean you have to stick with it even in front of clear evidence it is not working. What you have to keep in mind is not what you put into the option you’ve pursued, but what you will put into it from now on. Is it better putting that bit into something that is not worth it anymore, or in something new, perhaps something you still have to discover yourself?

This second one, of course, is the basic idea of sunk cost. One of the easiest economic concepts to understand, one of the most complicated to put into practice.

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