When I first heard the term ‘sunk costs’ I had no idea what it meant. However, I heard it from Seth Godin so I payed attention and came to find that it referred to money that had already been spent (which you can’t get back) that should not be considered in future decision making.
This idea can be applied to more than just money, it can also be applied to time although they say time is money so it all really just boils down to the same thing.
The idea of sunk costs is so useful because often we make decisions based on the past whereas sunk costs advises us to put that aside and make choices based on the present. I think it helps us to become more rational decision makers instead of relying on how things of the past have made us feel.
When making a decision you might find yourself making a pros and cons list.
The choice you make in the end is likely to be based on whether the cons make the benefits worth it.
But sometimes we focus too much on the short-term. Making a particular decision might be great right now, great in 6 months and even great in a year. However, in 2 years or 5 years it will end up being something you regret.
Or, perhaps we allow short-term pros to outweigh long-term cons.
It could be taking a job where you earn way more money but isn’t in a field you want to progress in. Maybe the alternative was a job in the field you’re interested in but you passed it up because the salary is lower and the commute is longer.
In the short-term you’re earning more money and you’re journey to work is shorter. But in the long-term you’re progressing in a job you don’t want to be in which probably means you’re not as happy as you could be.
On the flipside, if you’d chosen the other job in the short-term you’re salary would be lower and your commute would be longer. However in the long-term, your salary will increase, you’re progressing in field you’re interested in, you may choose to move closer to work and have a shorter commute or perhaps you now work from home 2 or 3 days a week and best of all you’re happier.
Today was black Friday.
It might have been a day where you spent hundreds of pounds or perhaps you bought nothing at all.
There are arguments against the day because it encourages excessive consumerism. On the other hand, it can be a great opportunity to take advantage of the sales and buy things you can’t usually afford or have wanted for a while.
Yet, you may not be getting as good a deal as you think.
A store that had a pair of boots in the sale 2 weeks ago for 35% off may now be selling them for 20% off, except there is now a Black Friday sign flashing at the top of the website.
Granted a discount is a discount but don’t fall into thinking that right now you’re getting the best deal.
If you had £10million what would you do differently?
We otfen think that money is the biggets barrier to us being able to achcive our dreams. However, that is rarely the case because where there is a will there is a way.
The real barrier is a little more challenging to overcome.
The real barrier is fear, a lack of confidence or low self-esteem, the list could go on.
If you’re scared to pursue your dreams without money you’ll still have some of that fear leftover when money is no longer an issue.
So work out what you’re afraid of and overcome it so that it’ll no longer hold you back.
Over the past year or so there has been a lot of conversation around wealth, that those with more should have less.
This isn’t applying to the people earning £200k or even a multi-millionaire but instead to those in the top percentile, those that have amassed more wealth than they could ever imagine.
People say it’s wrong to have billionaires because no person can ever spend that amount of money, people are starving or suffering and they’ve had to exploit other people to gain their wealth.
And so if it is wrong to have billionaires how do you police it and what is the limit?
Do you raise taxes for the wealthy to the point where billionaire status would be impossible?
Do you somehow limit a persons earnings to £999,999,999 or would you make it cap it at much less?
More importantly who would be in charge of it?
Whether having billionaires is or isn’t wrong, I don’t have an answer (and maybe there isn’t one). However, I do think it is a topic worth discussing.
I think it was on an episode of Seth Godins Podcast, Akimbo, that he spoke about deciding what you want to get paid for and what you’ll do for free.
It isn’t something I’ve heard spoken about often but I think it’s quite important.
These days most of us put stuff out for free whether it’s through blogging, a podcast, YouTube, Instagram etc.
But if you’re constantly creating on multiple platforms it might feel difficult to identify what you want to be paid for. It could be that you’re blog posts are free and you decide to put your podcast out on a site like Patreon.
If we look at it in terms of doing work for a company or organisation (not your listeners/readers directly), I’ve heard speakers say they’ll speak for free in schools or for charities but everything else is paid work.
I think Seth mentioned his blog and podcast are his free work but that he never speaks for free.
I think it’s important to establish early on what you want to be paid for, that way you’re less likely to be persuaded to work for free.
Privilege is a complex thing.
I think the reason that so many people have a hard time accepting their privilege is because they feel like it negates their hard work. They’re not comfortable with the realisation that if it wasn’t for certain things about them, they would have experienced life very differently. More often than not having more hurdles to overcome.
Privilege comes in many forms: financial, gender, race, sexuality and religion for a start but there is so much more.
And so if you come under the categories of Middle class, Male, White, Straight and Christian there is evidence to show that you face less barriers. Furthermore, the categories you fit into don’t disadvantage you, for the most part.
It can be challenging for people that feel like they have worked hard to be told that they’re privileged. They’re often the ones that believe in meritocracy and feel like anyone who can’t achieve the same as them must not be working hard enough.
Ironically, it’s often that everyone else has had to work harder.
I think the easiest way to understand this whole thing of privilege is to meet more people that are not like you. That way you actually get to see the what it’s like for other people.
Whether that is not continuing education because they can’t afford it, worrying that their natural hair will be a barrier to employment or even constantly having negative assumptions thrown at them because of their religions beliefs.
The point of all this is not for you to feel bad, the point is to gain understanding and awareness.
Your privilege doesn’t negate your hard work but that doesn’t mean it doesn’t exist.
I recently wrote a post called Does the customer determine value?
Here are some more thoughts related to value, price and the customer.
Think about an auction, the seller will often have a reserve price (the minimum amount they’re willing to sell the item for). Yet items often get sold for significantly higher because buyers are prepared to keep bidding if they want the item badly enough.
Even if an item could fetch around 20k, the seller can never start with that price, they have to allow the buyers to build up to it. Instead, the seller can only hope that people will pay that amount or at least above their minimum price.
I think it could be said that, although the seller sets the price it is in fact the customer that determines the value of the item.
I recently saw some things for sale and my first thought was that I wouldn’t buy them. In my opinion the items weren’t worth the price they were being sold for.
But people were buying the items.
Turns out that that even though I didn’t value the items at the price they were being sold for other people did, which got me thinking.
Who determines value?
If you’re selling something for £50 and nobody buys it, is it actually worth £50.
Or does value come from what the customer is willing to pay for it.
In my opinion it is the customer that determines the value because they’re the ones willing to pay for it. However, it is worth noting that just because you’re unable to sell to one group of people, doesn’t mean you’re prices are too high.
It might just mean that those people don’t see the value in what you’re selling.
But maybe another group will.
Let’s delve into a topic that matters. But first cue the music *plays satisfaction by the rolling stones*.
If someone asked the question of what would make you happier in your current job, what would you say?
If the answer is more money, think again, think about the job itself.
Some possible answers could be:
To be less stressed
Work less hours
To feel more connected to the people you work with
To work on more interesting projects
To learn a software or a new skill
To have a manager that’s helpful
To feel heard
To be recognised for the work you do
To feel valued
Some of these could probably apply to life in general and I’m guessing the same could be said for whatever is on your list too.
A lot of us settle when it comes to what we do for a living then get surprised that we’re unsatisfied.
If you decided to work in healthcare because you were taught it was a good stable job and you got scared into believing that an ‘unstable’ job would be too risky, sure you might grow to like what you do but you also might not.
If you make choices based on the belief that you can’t get the things you actually want, well then you’re probably not going to get them.
Now let’s get back the list and against each point write down what you can do to make them happen. And what you will do if there’s any pushback.
After a month or so you’ll probably notice some changes in how you feel about your job.
If not you can always get a new one.
You don’t have to grin and bear it.