Sunk Costs - Ink Scribbler
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Sunk Costs

I don’t read enough. I encountered a major mishap last week for not reading contracts thoroughly. I negotiated the price and signed the conforme, thinking that the contract stipulated different things. Stupid me. This experience is what I was talking about last week, that actually prompted me to start writing regularly on this blog.



I was in front of a store space that we are about to take over. The existing tenants were selling the improvements they made in the store. The improvements would be the flooring, glass panels, ceiling, partitions, access to existing approved plans and so on. In in the course of our discussion, one by one, he was pointing out things that they are taking from the store.


Pardon me. Did I just hear that wrong? 


Nope, I heard it correctly. The things that I thought were part of my purchase price were all excluded. He even showed me the contract again, and he was right. All along, I thought I got the best out this deal. But apparently, these people were trying to get the most out of their sunk cost. So there I was, finding myself shocked with the ongoing discussion.


Sunk Cost is a cost that has already been incurred and cannot be recovered. These existing plans, flooring, glass panels, will be sold for scrap if they choose to pull it out. On top of that, they will have to even spend for demolition. All in all, they will lose more money if they choose to demolish.


It’s a big company. I felt like a galungong beside a shark. In the course of our discussion, it became apparent to that the people I was talking to were not the business owners (I had doubts at the start), and they say that their management would rather demolish rather than renegotiating the deal. (YEAH RIGHT). To be honest, the amount I was offering them is HONESTLY not too shabby! The emotions are coming back as I write this, and a part of me wants to say that I really hate them. Why do they want to squeeze me dry, when they don’t care about money pala.


But I remember my office-situation 2 months ago. I found myself on the other side of the fence when we moved to a different office. We invested in our first office, making sure the floor is made of wood, changing the ceiling and adding more light, etc. Of course I wanted to get back my investment too. We originally wanted to sell the improvements to the next tenant, but the building would not cooperate. Back then, I would accept ANYTHING, even just 10% of what we spent. We only stayed in that office for 1.5 years too. But rather than spend money for demolition, we walked away with nothing.


Maybe I’m horrible at this. Or maybe it’s just because I didn’t read the contract properly. I definitely should have.


Obviously, starting from scratch wasn’t an option for a small fish like me. I really am better off paying the amount they offered rather than have nothing. So I figured, I don’t want to deal with this anymore, we’ll just agree. It was clear that they were employees, so they don’t really have an incentive to get the most out of it. (Now looking back, this theory is just very wrong, hahaha).


I will just be very casual and frank about my mistake. I started my statement of acquiescence with a laugh, “Sige, di naman pupunta sa inyo ung pera, so ok na” And that was when the conversation turned sour. What I just meant was that, they don’t really have an incentive to squeeze me dry because it’s the company’s money anyway. Does anybody understand me??


Thinking that I was hinting that they had a cut in the deal, she told me that they didn’t work that way and that I was questioning their credibility. Totally not what I meant though. To cut the story short, I couldn’t help back the tears. I felt like I was being questioned for questioning her credibility. HAHAHA! Hello, emotional wreck. :) I really felt very horrible.


Admittedly, now that I typed it out, my words really lacked some thought. I could just have left it out. ;(



I hope I never find myself in this situation again. I hope next time we will just benefit from the improvements of the previous tenant. Blessings from the sky! Or I hope that when the time comes, I will also be generous to the next tenant to inherit our store.



I am reminded of this verse,

What good will it be for someone to gain the whole world, yet forfeit their soul? Matthew 16:26

Money is money. It’s very important and very hard to earn. But my soul is priceless. It broke my heart to think that someone felt personally attacked by my careless words. A reminder that I am definitely far far far from being perfect. To be able to control my tongue in the moment is impossible without His grace. So please help me Lord!


This expensive experience is sunk cost now. I forgive myself and move on. Hahahuhu!

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