I am reposting a very very old post [published on Wednesday, April 6, 2011] in response to this week's option prompt, "Start where you are. Use what you have. Do what you can."
While studying project management, I came across the concept of sunk cost. It explains that if a cost has already been incurred due to a wrong step, that cost should not influence future decisions. The loss needs to be acknowledged, booked, and we must move on without letting it dictate the change of course.
I believe this principle applies equally well to life.
Often, we continue in a particular direction simply because we feel we have already invested a great deal of time and energy into it. We fear that changing course would mean losing all of that investment. But that past investment should not be part of the equation.
At times, there is a strong temptation to continue doing things in a certain way simply because we have always done them that way. Nothing has gone unmanageably wrong so far, and it is easy to cruise along this familiar path within a cozy comfort zone.
Yet, it is far easier—and less expensive—to correct our course early rather than wait for a major crisis to force change upon us. Delayed course correction often comes at a much higher cost.
I hope the nuclear energy agencies around the world took lessons from the Fukushima Nuclear Power Plant disaster in Japan following the tsunami.
The message is simple: proactive change can be uncomfortable, but it is essential for success and survival in a fast-changing world.
I leave you with a few random pictures taken from the city I reside in.
Beautiful shots of the city.
ReplyDeleteI think this principle is perfectly applicable to stock trading. People hold on to some stocks even if they have bottomed out, in the hope it will be on the top again as so much investment has already gone into it.