Remember learning about the “sunk cost” concept in an economics’ class? Essentially – you buy a ticket. For a concert. When the date of the concert comes up, you find you can’t go. Your friends will tell you to sell the ticket to recoup some of the cost. In the economic world though, it doesn’t matter – you already lost that money.
As I’ve been saving and paying down debt, this concept has been helpful to me. (Thought it’s super counterintuitive.)
This weekend the annual SXSW festival is making its way to Austin (film, music, interactive). I was excited to attend the interactive portion, for which I paid $895 *hangs head in shame*. I planned to hear Tim Berners-Lee (REAL inventor of the Internet – hope Al Gore doesn’t run into him, as Al will also be there) speak along with Elon Musk (the Tesla and SpaceX entrepreneur) and The Oatmeal. Shaquille O’Neal will be talking about how to effectively utilize social media. Organizers, last-minute, announced there would be a Grumpy Cat appearance. There were panels on how the online porn industry is changing and on the developing role women gamers are playing in the industry. Does it get any more weird, eclectic, incredible?
And what was a doable trip a few months ago suddenly became undoable. I couldn’t get work off – ok, so I can’t see the Oatmeal. I’ll just go for the weekend. But it’s $400 to change my flight. I’ll just use my American Airlines’ credit card.
It’s easy to feel like we’re losing money if we don’t take advantage of something we paid for that has a deferred value. The truth is if I had paid that $400 to change my ticket, I would have been $400 poorer. That’s it. The $895 I paid for the conference is resting peacefully back in December 2012. In an effort to revive it, I would have had to spend more money.
There’s a power in letting go of our sunk costs. Of accepting right where we are. I think I saved $400 this weekend. Let’s go with that.
If you haven’t delved into the SXSW Interactive sphere, I suggest following the coverage, if you’re into that sort of thing. Austin Chronicle.