Scott H Young

Fear of Loss


Fear of losing what you already have has a bigger impact than fear of failure. Starting a business wouldn’t be nearly as daunting if it didn’t bear the risk that you might not be able to get your old job back when you quit. People stay in broken relationships for fear of not finding anything better.

This fear persists even when it is obvious that staying where you are will result in more pain than changing. Psychologists refer to a similar concept called the “endowment effect”. This is the tendency for people to pay more to keep an item, than to acquire a new item of similar value. In other words, people will spend more energy protecting what they have then they would to get something new.

Fear of Loss and Eating Meat

A few years ago I became a vegetarian after reading books about the health and environmental benefits. A big concern that weighed in my mind before making the switch was of all the foods I was going to give up. In a typical North American diet, meat plays a huge role, eliminating this from your diet seems far too restrictive.

However, after I started the new diet, I added entirely new foods to my diet. Many of these foods I had never eaten before, and I really enjoyed them. In giving up one set of meals, I adopted a completely different set. Although I was no longer eating some foods, the amount of variety in my diet remained virtually the same.

The problem with my initial perspective had been an irrational fear of loss. I thought I would crave meaty dishes. What I didn’t imagine was that I would be adding new dishes that I would also enjoy. I never considered that, by staying a meat-eater, I would be missing the culinary experiences I had never been encouraged to try before.

I’m not using this example to convince you to become a vegetarian. What I am saying is that there is a tendency in human nature to focus on what might be lost from change, but ignoring what might never be experienced when staying where you are.

Fear of Loss and Travel

My younger sister is on a student exchange program in Denmark for one year. Many of her friends warned her that she might miss her home in Canada too much when going away. However, few people expressed the opposite logic, that by not going she may miss the friends and places she never had a chance to visit.

She’s had a great experience and I’m planning a separate foreign exchange in the upcoming year. Although I will miss some things here, if I chose not to go, I would also miss on the experiences of going.

Avoiding Fear of Loss

First, if you don’t have to, don’t make an either-or choice. The way to change your diet isn’t to commit to avoiding all foods of a certain category for the rest of your life. Taking on a thirty day trial, with the option of reverting back, lets you keep a foot in both worlds. My initial commitment to vegetarianism was only one month.

Don’t burn the ships if you don’t have to. While cutting off all escape routes can promote action, more often it promotes procrastination. If you make your decision either-or, you’ll probably just stay put.

If I were going to start a new business, I wouldn’t make an immediate switch from my current full-time pursuit. I’d probably start in my spare time and grow the project until it could support me. Drastic measures like quitting your job, cutting off friendships and salting the earth are generally unnecessary tactics that should only be used in extreme situations.

A few ways you can have a foot in both worlds are:

  • 30 Day Trials. The commitment period is a month. If you hate it after thirty days, you can quit.
  • Gradual commitments. Start with just a small time investment and expand slowly. You don’t have to quit your job and change your life in one day.
  • Invest small amounts. Don’t risk your entire investment in one shot, space it in increments to test new pursuits.

Focus on Opportunity Costs

Because fear of loss is instinctual, you need to combat it consciously with an opposing form of thinking: opportunity costs. An opportunity cost is the price of not taking on an action. If you had the potential to earn $1000, but took a different choice, earning $100, you’ve just paid a hidden $900 opportunity cost. This cost is just as real and significant as if you had paid out $900 in cash from your wallet.

Focus on what might happen if you fail to take the daring step. While fear of loss will happen today, regret will happen for the rest of your life.


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9 Responses to “Fear of Loss”

  1. Diana says:

    Perfectly put. Now can you explain this to my husband?

  2. Loren says:

    The gradual change works well. I have been teaching at one location for many years. In order to increase my earnings and travel less, I have opted to teach from home. By doing this gradually, I avoid the risk of having less students and losing money, while increasing my earnings gradually, every week.
    On a personal note, my son has become a vegetarian. He has shown us he health benefis of eating better, but every time I pass the restaurant and smeel charcoal burgers cooking, my mouth waters and my teeth sharpen. I feel like a T-Rex trying to become a leaf eater. Fear of loss becomes “loss of control”.

  3. I love the idea of an opportunity cost, first time I have heard of it.

    Mine is definetly an non financial opportunity – huge amounts of time with my wife and kids versus working away during the week and only seeing them at the weekend.

    Only 6 more weeks before I get my payback

  4. Slippery Jim says:

    You should come to Sweden for your exchange. Free tuition!

  5. Daniel says:

    Could you expand on this a little bit, please:
    “While cutting off all escape routes can promote action, more often it promotes procrastination.”

    I find it very interesting, but I don’t see any direct relation between the two.

    Thanks.

  6. Scott Young says:

    Daniel,

    What I meant to suggest was that if your thinking is either: quit your job or start a business, you will probably procrastinate on this decision for fear of loss. Whenever you try to take too drastic a step, your mind holds you back.

    -Scott

  7. Daniel says:

    So what you meant was: Planning to cut off all escape routes can promote action, more often it promotes procrastination.

    How about the situation when you already cut off all other bridges and still procrastinate. This is where I find myself now.
    I’m still not able to take action in the right direction.
    That direction is: making money with the small firm I’ve established.
    I enjoy the field the business is in, so I couldn’t say I don’t like what I’m supposed to do…

    I’m clueless…
    I know everything and still cannot act.
    I also procrastinate because I have lots of stimuli around me.

    Thanks.

  8. hermes handbags says:

    love the idea of an opportunity cost, first time I have heard of it.

    Mine is definetly an non financial opportunity – huge amounts of time with my wife and kids versus working away during the week and only seeing them at the weekend.

    Only 6 more weeks before I get my payback

Debate is fine, flaming is not. Pretend that this comment form is a discussion taking place in my house. That means I enjoy constructive criticism and polite suggestions. Personal attacks, insults and all-purpose nastiness will be removed especially if it is directed at other readers.

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