Ever feel stuck? Ever feel like you’ve got goals and dreams you just can’t realize?
If asked, you could probably rattle off a list of reasons why nothing’s happened. And, on the surface, the list might even make sense.
The only problem is that the list is wrong.
That’s because we tend to get stuck for reasons that are often invisible to us. In fact behavioral economists have shown that we often behave in ways that are far from rational. Three of those ways – ignoring sunk costs, loss aversion, and status quo bias – cost us much more than we know (check out Richard Thaler‘s book, Misbehaving to learn more).
Sunk costs. These are costs that, once incurred, can’t be recovered. For example, you may have earned a degree in finance but now realize you want to teach. Given the cost of your degree, you may feel obligated to work in finance until you pay off loans or achieve a certain level of success. In the meantime, you’re miserable.
Loss aversion. We are twice as averse to a loss as we are to any gain. This is something we see all the time: you have tenure or seniority, and you can’t imagine giving it up, even though you desperately want to be doing something else.
Status quo bias. We avoid taking action and making any changes because we view change as risky. For example, we want to do something else, but we believe it’ll pay less than what we earn in our current job. We can’t imagine being happier making this change because all we can see is the possible loss of income.
So what steps can we take?
- Talk to people who’ve overcome these biases. Seek out their stories online in articles and podcasts. Notice the patterns in their stories and how they overcame these biases.
- Remember to start small. Take one small action each day that moves you closer to your dream. Share this commitment with a friend.
- Focus on what you’ve gained. As you reflect on times in your life when you experienced loss, think about what you gained. Empathy? Opportunities you didn’t have before? New friends?
If you begin to notice these biases in yourself or others, let me know. Once you’re aware, you’ll find them hard to miss.