Friday, August 8, 2014

Sunk Costs versus Opportunity Costs

Sunk costs are the time and effort we have put into something already.

Opportunity costs are what we are giving up to do a given activity in the future.

Most people value sunk costs more than opportunity costs. In other words we value the past more than we value our future. Yet, is that really the best way to go through life? I mean, the future opportunities could be very positive from making a change. This is the tension of change. The pull to continue the way things always have been or the pull to do something different. The point is, life has hard decisions about your future. Change can be very difficult. Yet it is change, and a new opportunity that can redirect the course of your life. Sometimes the opportunity costs of doing what we always have done become too great to ignore and we need to make a change.

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