sunk cost
A sunk cost is money already spent that you cannot get back, and it should never influence what you decide to do next.
In plain English
You have put ₦4 million into a business that is not working. Everybody can see it. You can see it. And you keep going, because stopping would mean admitting the ₦4 million is gone.
That ₦4 million is a sunk cost. It is spent. It is not coming back whether you continue or stop, which means it is completely irrelevant to the only question that matters, which is whether the next naira you put in is likely to come back.
Human beings are terrible at this. We stay in bad businesses, bad investments, bad courses and bad relationships because of what we have already put in. We call it commitment. It is usually just an unwillingness to feel the loss we have already suffered.
The uncomfortable truth is that the loss happened already. Continuing does not undo it, it only adds to it, and the ₦4 million quietly becomes ₦7 million while you protect your feelings.
So ask the question cleanly. Knowing everything I know now, and pretending I have spent nothing at all, would I put money into this today?
If the answer is no, then walk away. The money was gone either way. The only thing you can still save is what comes next.
You have spent ₦4 million on a shop that loses money every month. The question is not how to recover the ₦4 million. It is whether you would open this shop today, knowing what you now know. If not, every further month costs you more.
Questions people ask
Is this the same as giving up too easily?
No. It is about judging the future on its own merits. If the venture genuinely can work, continue. If it cannot, the money already spent is not a reason to spend more.
Why is it so hard to walk away?
Because walking away forces you to feel a loss you have been avoiding. Continuing postpones the feeling and increases the loss.
Does this apply outside money?
Constantly. Careers, courses, relationships. The years already spent are gone whatever you do next, which is a hard sentence and a liberating one.
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