Smart Goals, Sunk Costs, and Clean Slates

By James M. Jackson

Recently I felt like a modern-day Sisyphus.

All right, let me walk that statement back: I am not dead, not even sick. I have never been a king, let alone the founder of a kingdom—although I did create Wolf’s Echo Press, so maybe that counts. While smoke from Canadian fires is making the Upper Midwest air obnoxious, I am not in the underworld. The boulders that I pushed uphill didn’t always roll down; a few are resting safely on a plateau. Zeus isn’t punishing me for my hubris; I did too fine a job of that myself to require any gods to intervene.

Which brings me to S.M.A.R.T. goals. I’ve written blogs about them in the past (link here). I first learned about SMART goals in a corporate environment. There, the acronym stood for Specific, Measurable, Agreed (employee and management), Realistic, and Timely (with a deadline). As a self-employed individual, Agreed became Achievable and Realistic became Relevant.

At the beginning of the year, I set myself multiple SMART goals. And I made two huge mistakes.

Mistake One: Each individual goal was SMART. Combined, they were dumb because taken together they were not Achievable.

Mistake Two: I allowed Sunk Costs to drive my priorities.

Sunk costs are past investments that you cannot recover. For example, the hours of my time to write the first draft, the electricity bought to run the computer to record it, and the paper to print out the draft are all sunk costs. Without additional effort, I can’t convert the first draft into revenue. Therefore, I cannot recover those costs.

The problem with sunk costs is not that the money and time are gone. The issue is we have a psychological desire to recoup them. When examining which projects we should tackle, instead of evaluating future costs and future benefits, we allow our psyches to put a thumb on the scales of those projects with large sunk costs. When setting goals, our focus must remain on the results and what resources (time and money and others) we need to achieve it.

A hypothetical example comparing two projects may make this economic concept clear.

Project 1 is a novel: During 2022, you spent 500 hours creating a standalone novel and paid a developmental editor $1,000 to give you feedback. It will require another 500 hours and another $1,000 to bring it to publication. To make the situation uncomplicated, you have a buyer who will pay you $10,000 for total rights. One hitch: you have to turn in the manuscript by March 1.

Project 2 is work that pays you $25 per hour for 375 hours of your time. Again, you must complete your work by March 1.

You are equally excited by both projects. However, your significant other makes it clear that if you take on both contracts, they will divorce you. Lawyer fees alone will run $25,000, not to mention that after your divorce your ex- will have control over 50% of your copyrights on everything else you already published. And despite that threat, you are still in love. Doing both is not an option.

Which do you choose? Math says you pick Project 2. You earn $9,375 and work 375 hours. Project 1 nets you only $9,000 and requires 500 hours of time.

And yet, many of us will spend the extra 125 hours and give up $375 because we’ve already invested so much in Project 1.

When I structured my 2023 goals, I had a lot of sunk costs. And a lot of goals. And even though I accomplished a lot during the first six months of 2023, I felt like Sisyphus.

Realizing my mistakes led me to adopt a clean-slate approach toward setting SMART goals for the second half of the year. I noted the current state of each project solely to estimate what resources (time and money) I would need to complete it. I estimated its value to me. (That value recognized both monetary rewards and enjoyment.)

Then I prioritized, leaving ample room for underestimates and flexibility. I told my Sisyphean self to set aside all the boulders I would not work on in the next six months. I gave myself a glass of wine and an hour to grieve, and then I finished the wine as a toast to all the goals I had already met this year.

After completing that process, I’m looking forward to the rest of the year. What is your strategy when your enjoyment of work disappears?

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James M. Jackson authors the Seamus McCree series. Full of mystery and suspense, these thrillers explore financial crimes, family relationships, and what happens when they mix. You can sign up for his newsletter and find more information about Jim and his books at https://jamesmjackson.com.