Sunk Cost
✓ Last verified 14 Sep 2026
The short version
A sunk cost is money (or time) already spent that can't be recovered regardless of what you decide next - the 'sunk cost fallacy' is letting that already-gone amount influence a decision that should only be based on what happens from here.
If a stock you bought for ₹1,00,000 has fallen to ₹60,000, that ₹1,00,000 is a sunk cost - it's gone whether you sell today or hold on. The only decision that actually matters now is whether the stock, from today's ₹60,000 starting point, is a better use of that money than any other option available today. Holding on specifically to get back to what was paid is the sunk cost fallacy - the original purchase price is irrelevant to what's the smartest decision going forward, even though it's psychologically hard to ignore. The same trap shows up in continuing a bad course, a failing side business, or an unused gym membership because of what's already been spent.
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