How to apply the theory of sunk cost to your life?

Sunk cost is an interesting topic that comes up often during business school. Sunk cost is the time, money, or resources that have been spent in a venture. Any further investment in the venture should be evaluated on its present value and future potential without worrying about the sunk cost. I wish I had understood this concept earlier.

Your past is a sunk cost. The time you have spent in your life’s ventures like building a hobby, a career, company, or a relationship is a sunk cost. You can choose to invest more resources into your current state of things but it only makes sense if it brings you joy or you see future potential in it otherwise you are just growing the value of your sunk cost. I know it's not as easy as it sounds. People spend decades establishing their career and relationships. It's hard to cut loose because of the time, money and resource investment. It has defined your life so far.

Source: OpenAI

But, let's think of it in a different way from the perspective of a company. A company has many ventures in which it has invested billions of dollars. They try to make these ventures succeed with all their expertise but when they realize that a venture cannot succeed no matter what, they discontinue the project or give it away even if it at a loss. The company has realized that it's better to cut their losses and move on to better things. Similarly, you cannot undo what has happened how much ever you wish and regret it. Any further resources spent at this point is increasing your sunk cost and making your baggage heavier. Sunk cost cannot be the reason to continue doing what you are doing. When you see no further potential, it's better to find a way to exit and cut your losses.

Just like a company learns from its bad investments and losses, so can you. The venture was not serving your life anymore but you learnt something from it and that's what you will carry. Hold those learnings and understanding of what you want or don't want close to you so you try to not make the same mistakes again.

I found this to be the most helpful way to move on from my bad ventures like my career as an engineer which I took years to build. It took me a while to realize it but when I realized that years spent cannot be the reason for me to continue doing what I hate, I was relieved and empowered to move on.