Using Sunk Costs To Your Advantage

Most people have things they’re striving for, things they want to be.  For many it’s to lose weight and live healthier.  Or maybe it’s to start that successful podcasting business. 

A common trap in modern society is to look at the gap between where you are and where you want to be, and to buy stuff to try to fill it.  There’s no shortage of companies promising you’ll get thin and fit if you only buy their product.

Buying These Does Not Make You A Runner

But buying an expensive bike won’t make you a cyclist.  You’ve got to put in the long hours and ride it to do that.  And buying running shoes will fail to make you a runner, actual running is necessary.  Sorry.  

Similarly, a nice new microphone, pop screen, and editing software will not make a successful podcast.  Good content, long hours, and hard work do. 

You can’t buy what you want to be.  Closing the gap between where you are now and where you want to be costs time and effort, not money.

I’ve surely been guilty of trying to buy my way to a new goal.  For instance, after deciding I wanted to start an oil painting hobby years ago I went out and spent some good money on paints, canvases, and other supplies. 

What I didn’t spend as much time on was actually reading about and practicing how to mix paints.  I quit after deciding I disliked it.  I’m still not sure if my dislike resulted from a lack of trying, or from the disappointment that the stuff I bought didn’t make it easier to do. 

Sink In

But sometimes spending money by using the concept of “sunk costs” does work to help me close a gap.  A sunk cost is a cost that has already been incurred and cannot be recovered.  Like many investors, I have a bit of a history with sunk costs.

Take racing.  Whenever I find my running or cycling to be stagnant, I know it’s time to sign up for a race.  Something happens when I click “submit” on a race website and commit $50 or $100 to an event that lights a fire in me. 

Most races don’t give refunds, that money is gone.  So being that I’m pretty good at money and don’t like wasting it, the financial commitment to the race motivates the hell out of me.  

Once I pay, it’s game on.

It’s a sunk cost, it ain’t coming back.  And damn if I’m not going to get my money’s worth. 

So when I do this my training tends to go into hyper-drive.  I start getting results I would not have gotten had I not spent money on the race. 

This strategy works for me mostly because of the spent money, but to be honest, partly because I’m a bit competitive.  As much as I don’t want to delve into the ill-advised depths of comparison, a part of me is somewhat competitive.  It mostly manifests itself by being competitive against my old self.  I always want to beat my personal records because it gives me this funny delusion that I’m holding off age and will live forever.

But I’m also a bit competitive against others, even though I’d rather not be.  When I’m surrounded by hundreds of others at the starting line of a race, I get motivated.  Something clicks.  I can dig deeper, and suffer more. 

Recently I used my sunk cost strategy to great effect.  My running fitness has been declining since last summer.  Some of it has been a mild case of sciatica, but most of it has been lackadaisical effort. 

By February I knew I needed a motivational tool, it had been too long since I did a race.  So I found a cool 6 mile trail run and signed up. 

Proof, $60 spent.  Game on.

Sure enough, I started putting in the training miles – and most importantly the faster miles – that I had been avoiding.  The ones that hurt.

How did it go?

I came in 7th in my age group out of 38 racers!  That’s one of my best placings ever in a running race! 

Buying Motivation

In the end, I do agree you can’t buy what you want to be.  Becoming successful at anything – be it losing weight or podcasting requires you to put in the hard work.  You can’t just buy the necessary stuff and hope it’s going to magically happen.

But if you’re like me and don’t like to waste money I do see a place for buying motivation.  You may be able to use sunk costs as a catalyst for change.

Instead of “put your money where your mouth is”, it’s “put your money where your goals are” then chase that investment and make it pay off. 

Your turn readers – Have you ever used sunk costs to motivate yourself to do something or to reach a goal?