Loss Aversion

I went on a 4-day business trip recently, and our kids aged about 7 years while I was gone.

I left an 11-year old who gets angry when his mom or I start to read “Goodnight Moon” because he knows it’s the last book before bed, an 8-year old who falls asleep on our lap with his thumb in his mouth, and a 6-year old who can’t get enough of his bouncy seat.

I came home to an 11-year old who rolls his eyes at my jokes and answers my questions with grunts, an 8-year old who’s learning to play euchre, and a 6-year old who’s figured out how to request my electronic permission to download anything from the App Store, and then grant that permission on my behalf without me knowing a thing about it.

I’m afraid to go away again — I’ll come back and they’ll be driving.  Although it would be nice to get picked up at the airport.  Maybe they could buy me a drink on the way home.  Make it a double.

We don’t notice the gradual, until we do.  Until the accumulation of gradual amounts to significant and hits us right between the eyes.  Until we have to look around them instead of just being able to peer over them.  Until they’re putting on our shoes to run outside to get the mail.  Until they ask us — for real — what we’re scared of.  Not things like heights and spiders and thunder.  Things like betrayal and mortality and loss.

Researchers have discovered a bias that’s hard coded into our neurons and synapses.  It’s called loss aversion.  Loss aversion simply says that we’ll put more effort into hanging onto something we have than we will in gaining something we don’t.  It explains why many of us bog down our IRAs and 401k’s with treasury bills and money market accounts, passing up stock market gains for the guaranteed safety of 1 or 2% per year.  It explains why I have half a closet full of shirts that I haven’t worn for 3 years, yet I wouldn’t pay $0.25 for any of them if I ran across them at Goodwill.  But because they’re in my closet, giving them away would hurt way more than losing a quarter.

It might explain why we have such a hard time watching our kids grow up.

Turns out we’re all afraid of loss.  Every day is a day closer to watching them head off to college, or to start their own family, or to sail to some remote island to help save the whales or study an indigenous people who haven’t been exposed to cell phones or Little Debbie snack cakes.

It’s pretty ridiculous, especially when you consider the alternative — them not growing up.  Nobody wants that.  I can’t wait until they’re old enough to stay home by themselves.  I can’t wait until he’s old enough to drive his younger brothers to practice.  I can’t wait until they can pack their own lunches.

And then the first time we walk into the kitchen and catch one of them packing their own lunch, we wonder where the time has gone.  And we get nostalgic over the time gone by.  The time we’ve lost.

These ought to be happy occasions.  Signs that they’re on the way to independence, and that we’re finally on the way to some peace and quiet around here.  We should be celebrating these moments, not regretting the time that’s passed.

Psychologists have posited a mitigation technique for loss aversion.  When you’re afraid that loss aversion may be misleading you into a bad decision, remove yourself from the situation by pretending you’re advising a close friend.  Turns out fear of loss doesn’t impact the quality of our decisions when we’re deciding for someone else.

So let me give you some advice, my close friend.  Choose to enjoy those moments.  They’re signs that you’re doing some things right.

Oh, and try taking some of that cash from under the mattress and putting it in the stock market.

You can thank me later.

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2 comments

  1. Stacey · September 3, 2016

    Chris,
    I truly enjoy every post (Pat shares them with me). This one was particularly meaningful as I say “They’re supposed to grow up” whenever someone laments their children getting older. My college roommate wrote about rearing adults – children to grow up to be the adults you want them to be- and not thinking about raising children. Anyhow, thank you for all of your witty and moving posts.
    Stacey

    Like

    • chrissowersblog · September 4, 2016

      Thank you Stacey!
      I love hearing from Pat after every one of these. Great to hear that you’re enjoying them as well.
      “Rearing adults” — what a cool concept. I read your comment yesterday and thought about it last evening when our 6-year old decided to take the training wheels off of his bike. 🙂
      -Chris

      Like

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