Day 293: On Cutting Your Losse s

Cut your losses short and let your winners run.

—A Wall Street saying

I once invested several thousand dollars in an extensive coaching course. I thought that since I was already an author, it wouldn’t be that different to become a coach, too. I spent over a month learning from that course, and ultimately gave up with little to show for it.

After a month of studying, I didn’t feel I knew that much more about coaching to be able to coach — and it didn’t matter, because I knew that I wouldn’t do it, anyway. My idea to become a coach was a mistake. I realized that my strengths lie in writing books, and not in giving personalized advice. Continuing my education would have been continuing to invest my time and energy into something that was destined to fail anyway. I cut my losses short and refocused on writing.

Due to loss aversion, people have a tendency to avoid losses over acquiring equivalent gains, 292 This means that you’d rather keep investing your time and energy into a failed project than cut it short and redirect your attention to something that can produce better results.

It’s a dangerous trap for persistent people, because you might spend months (if not years) doing something that will ultimately lead you nowhere. If you’re keeping at it only because of what you’ve already invested, ask yourself if it’s the best use of your time. If it isn’t, and there are better things you can do, accept the losses as a learning experience and move on.