Are you stuck in a dead-end job? Do debts, insufficient income, or other financial obligations prevent you from doing what you want? Are you terrified at the prospect of making radical changes to your life?
The Sunk Cost Bias
I never wanted to be an attorney.
At no point in my life did I ever aspire to practice law. Not when I was a kid. Not when I was a student. And certainly not now as a professional.
I had different reasons for going to law school, but those faded away a few short weeks after I started. If enrolling in law school was the biggest mistake of my life, then my second-biggest mistake was handcuffing myself to law school through to graduation on account of the “sunk cost bias”.
Ironically, the first time I heard of the sunk cost bias was in law school. My “Law and Economics” professor was explaining different types of biases that skew the decisions we make. She accurately predicted that there were a few students in the class who realized that law school was a mistake. (I was one of the students she was referring to, and I knew it.)
She went on to explain that if we were being rational, we would cut our losses and drop out of law school now. But she also predicted that we would all stick it out until graduation because of the sunk cost bias.
In hindsight, she was correct on both counts. My single-biggest regret in my life is that I did not pay better attention to her lesson that day.
By the time I graduated, I had over $130,000 in student loan debt. I was too far removed from my undergraduate studies in microbiology to make a decent living in that field. (The big lie of education is that advanced degrees open up more doors. Higher education opens some doors, but closes many more behind you.) There was no conceivable way to get out from that much debt without working as an attorney.
The American Nightmare
Over the next decade, I did what society expected of me. I worked hard, paid down debt, bought more stuff, incurred more debt, worked harder – and on and on the cycle went. Although getting married, having children, and white picket fences wasn’t part of the plan, I bought into every other aspect of the “American Dream”. I bought a nice and reliable vehicle; a house with eight times more square footage than I needed, and a ton of useless junk to fill it with.
Staging a Prison Break
In March 2016, I paid off the second of my three student loans. For years, I had vowed to retire practicing law as soon as my student loans were paid off. That always seemed to be in the distant future. But with only one loan remaining, the distant future was no longer quite so distant.
It suddenly became urgent for me to make some plans. If I didn’t have an exit strategy in place before my final loan was paid off, I would be practicing voluntarily. I wouldn’t be able to forgive myself for that.
Not just any old job or business would do. I had spent 10 years working a job I despised to pay debt for an education I no longer valued. Ten years from now, I don’t want to still be doing work I hate. Ten years from now, I don’t want to look back at this point in my life and regret not making a change.
I thought about how my expenses might change after retirement and hashed out a few potential budgets. Then I thought about potential sources of income to replace my revenue as an attorney.
But draw Venn diagram of jobs that (a) I am qualified for, (b) would bring me personal gratification, and (c) sustain my current lifestyle. The number of jobs and business opportunities in the intersection of those three criteria is minimal or non-existent.
My choice was straightforward. Keep practicing law and maintain my lifestyle, or find a new line of work and accept a lower standard of living. The sunk cost bias had already ruined one decade of my life. If I chose to keep my career and lifestyle, history would be poised to repeat itself.
Investing in Freedom
I recognized that the stuff I owned was limiting my opportunities to live my life. I did not want to enslave myself to a lousy career for the sake of material possessions. It was not easy, but I eventually accepted that I had to give up my house and most of the stuff inside it if I wanted to be happy.
It’s important not to look at any of this as a loss. On the contrary – this is an investment. By ridding myself of material possessions, I am purchasing freedom. I will have the freedom to do work that is less lucrative but more enjoyable. I will have the freedom to be more mobile with less stuff to carry with me.
Taking Your First Steps
Millions of Americans are in the same boat I am. They work jobs they hate solely for the purpose of paying bills. Most of them have bigger and better dreams, but they put them off to someday in the distant future. They believe (often erroneously) that other obligations prevent them from pursuing their dreams. Many may be desperate to make a change, but don’t know how to start. They have spent their entire lives mentally-conditioned to pursue consumer goods and the American Dream.
Maybe you are one of those people.
I won’t pretend that what works for me will work for everyone else. We all start with different constraints and resources, and we’re all heading in our own unique direction. But allow me to share my experiences. You can take the ingredients that work for you, leave behind the ones that don’t, and start to craft your own recipe for success.
What I’ve described (quitting my job, ridding myself of possessions, and exploring a meaningful life) is rare in American society. Only a small number of us will ever successfully cast off the shackles of consumerism. It may be rare, but it is not a superhuman feat. You don’t have to start out wealthy, wind up a pauper, or possess magical powers.
You do need to be [brutally] honest with yourself and be willing to face some uncomfortable truths. You’ll need a willingness to break with societal norms and conventional thinking. And you will need to have clearly-defined values so that it’s easier to identify your motivation for seeking a lifestyle change.
Some Thoughts & Questions to Consider Yourself
- If you met with the ten-year-old version of yourself, what aspects of your current life would make your younger self break down in tears?
- If ten years from now you’re still living the same life you’re living now, would you be pleased or upset?
- What are your personal values? (Examples: family, health, exploration, knowledge, experiences, travel, etc.). Is your current life facilitating or inhibiting your pursuit of these values?
- What sort of work would you enjoy doing? What are you willing to do to have the freedom to do that sort of work? Do you consider those changes to be sacrifices or investments?
- Homes, vehicles, and consumer goods cost more than their initial purchase price. Insurance, regular maintenance, repair, replacement, and storage costs are just some of the many ways that stuff can continue to cost you money. How much does your stuff really cost?
- Do you cling to things in life simply because you’ve sunk money into them in the past? How much control are you willing to allow inanimate objects to have over your life?
- We often think of life changes as something we will do someday. If not today, then when?
- Take baby steps. Do something today – no matter how small – to begin a change in your life. Then do something else tomorrow. Keep taking small steps until you build momentum.