Ignore sunk costs - decisions made yesterday are not relevant to the future
Summary
- When making a new decision, we must ignore what we did yesterday
Details
- Sunk costs are irrelevant to our future decisions
- This may include skills earned, machines purchased
- Always make the best decision for now. things you bought in the past are already bought and you cannot recover that money.
References
Quotes
When making a new decision, we must ignore what we acquired yesterday.
The skills we earned, the machines we purchased, the privileges we were given—they are all gifts to you from the you of yesterday. Like all gifts, they’re optional. You don’t need to accept them or keep them around.
It’s one of the most profound and difficult lessons every MBA is taught: Ignore sunk costs. Money and effort you spent yesterday should have nothing to do with decisions you make tomorrow, because each decision is a new one.