In a closet in our home sits a coin collection. We inherited part of it from my parents, and Evie’s dad gave us the rest some years ago. It’s what you might call a typical family coin collection: There are some fairly old coins and bills in it--some dating to the nineteenth century. Yet when you meticulously check the value of each piece of currency, you don’t find any that will pay off your mortgage. Its total worth is well under $1,000.

Neither Evie nor I have any interest in collecting coins. Yet we’ve held on to this collection, as most parents probably would, with the hope of eventually passing it on to our grandchildren. Of course, our two sons have to marry and produce a few offspring for that goal to materialize.

Recently, though, it occurred to me that this long-term goal isn’t such a good idea. Inheriting the collection was seamless for Evie and me, because we’re both only children. But finding an equitable way to divide such a miscellaneous assortment among several grandkids could be difficult. One of them might want certain coins given to another, and feel treated unfairly. Trying to divide the collection fairly between them could be downright unpleasant--quite the opposite experience you would hope for in bestowing a gift.

Then I thought of an alternative plan: We could sell the collection, and invest the proceeds in a savings account. Over time, that account’s value would probably appreciate more than the coin collection would. Then, at some future point, we could take each grandchild to a coin shop and allow each one to spend an even share of that account on whatever coins he or she chooses. No child could possibly feel cheated this way. In fact, this idea seemed like the perfect solution to me intellectually--an ideal win-win arrangement for everyone.

But I haven’t been able to bring myself emotionally to carry it out. This collection is part of our family’s history, and passed down over several generations. It seems sacrilegious to part with it.

This--in spite of the fact that if you replaced these coins and bills with ones of similar age and value, I wouldn’t be able to tell the difference, for I haven’t examined this collection in years! I don’t have a clue what specific items of currency are included in it. Still, it’s our collection--our family’s collection. How could I possibly let go of it?

The Endowment Effect

My hesitation to sell the family coin collection reflects a tendency that financial counselors call “the endowment effect.” It’s our inclination to value something more highly than it is actually worth, simply because we own it. We think of the possession as an extension of ourselves. And even if we would clearly benefit by parting with it, we may hold on to it for nostalgic reasons.

The endowment effect often muddies our thinking in important financial decisions and hinders serious investing. If you’ve long held General Motors stock, for instance--even more so if your family has--you may attach sentimental value to it. Never mind if there are countless stock options out there offering a better return. You may find it hard to think of letting go of GM and buying something else.

The term “endowment effect” was coined by risk management specialist Richard Thaler in the early 1970s. As a doctoral student in behavioral finance, Thaler became intrigued with “the disparity between prices for which people were willing to buy and sell the identical items.”* This fascination led him to devote much of his life to studying how we tend to value things more once we own them.

In one experiment, he and an associate gave Cornell coffee mugs to students at that university, and then told the students to take them home. Later these students were asked to specify the lowest price for which they would consider selling their mug, and the average was $5.25. Other students were asked what was the highest price they would pay for such a mug, and that average was $2.25.

Thaler conducted many other experiments, all pointing to the same conclusion: “Once something is owned, its owner does not part with it lightly, regardless of what an objective valuation might reveal.”*

Our reluctance to part with what we own can also be driven by another tendency, which financial advisors term “loss aversion.” We have a strong distaste for loss as humans, so much so that we tend to value our losses more greatly than our gains. The pain we feel at losing $1,000, for instance, is greater than the joy we feel at gaining the same amount. The effect of loss aversion is such that an investor may hold on to even a severely declining stock, rather than sell it and cut his losses--for to dump it would be to admit to himself and others that he had made a bad investment. It’s easier to stay in denial, by keeping the stock and holding on to a vain hope it will eventually recover.

It’s the nature of loss aversion, too, that we tend to value something more when we’re faced with the possibility of losing it. That family coin collection suddenly took on much more importance to me when I considered selling it; up till then, I had scarcely thought about it at all.

The Challenge of Letting Go

These same tendencies that can cause us to prize certain possessions too highly can cause us to overvalue other attachments in our life as well. We can become too emotionally tied to a relationship, a home, a region where we live, a hobby, a church, a club--as well as to certain human distinctives that make up our life, such as our habits, traits, expectations, social status and lifestyle. We are overrating any of these things if we find it hard to let go of it when we know we would benefit by doing so.

We shouldn’t underestimate the importance of this letting-go part anytime that God has a new horizon for us. Tradeoffs are involved every time we take a step forward with our life; choosing a new option always means letting go of an old one. If we’re too inclined to hold on to the past at any point, we’ll prevent ourselves from experiencing God’s best.

Three common areas where many find letting go difficult include:

Leaving singleness for marriage. Getting married can be one of the most life-giving steps we ever take. And we may accept an opportunity to marry with joy, and strong conviction we’re doing the right thing. Yet not a few people, as they move closer to their wedding date, begin to focus--even obsessively--on what they have to give up in order to marry. The tradeoff involved in sacrificing singleness for marriage is substantial. We’re letting go of certain freedoms we’ve long enjoyed and a status with which we may have grown comfortable; we’re also forsaking forever the chance to choose someone else to marry.

These tradeoffs are much more than worth it, if we truly want to be married and have a good opportunity. Yet some who are in this privileged position dwell so much on what they’ll lose by marrying that they back out; others endure agonizing mood swings for some time, before finally going ahead.

Moving. God has made a big world, with vast opportunities for individuals to be productive and to find solutions to their most pressing needs. It may be that a dream we have for our life can be realized much better in another region than where we now live. God’s adventures for his people often involve such geographical moves. Yet these moves require leaving a familiar home, region and friends--for the unknown. We can focus so much on what we have to sacrifice by moving, that we fail to appreciate the benefits God may have in store for us in living somewhere else.

Letting go of expectations. Camille had dreamed of becoming a nurse since early elementary school. In college, though, she found her vocational interests shifting. An elective course in architecture, which Camille took during her freshman year, ignited an interest in the subject, which intensified as she became fascinated with the design of vintage buildings on her campus. Finally, through much soul-searching and vocational counseling, she determined she was better suited for a career in architectural design than in nursing. The hardest part of shifting directions, though, was letting go of her dream of being a nurse. It had been with her since early childhood, and she had “owned” it intensely. Parting with it felt like turning her back on an old friend.

So it often is with the shedding of expectations. Yet it’s always necessary when we embrace a new dream, for doing so requires letting go of an old one. And that can be our greatest challenging in taking a new direction. Even if the old dream no longer fits us well, we may still feel a strange sense of loyalty to it, and feel unfaithful admitting that we no longer feel the passion for it that we once did.

Both the endowment effect and loss aversion can strike us strongly at such a time. The old dream has become such a part of us that we’re still valuing it more highly than we should. And letting go of it means admitting we had misjudged what was best for our life.

Biblical Examples

We find enlightening examples of both the endowment effect and loss aversion in the Bible. Some individuals in Scripture were clearly held back by these tendencies, while others triumphed over them.

At one extreme is the rich young ruler who encountered Jesus, asking him, “Good teacher, what must I do to inherit eternal life?” (Mk 10:17 RSV). This man wanted to know how to gain entrance to heaven, and this prompted his question about eternal life. Jesus, though, understood eternal life more broadly, as a supreme quality of life that begins the moment one chooses to follow him, and continues throughout eternity. It was in light of this fuller understanding that he addressed the young man’s concern.

Jesus first asked him if he had fulfilled the commandments, and the man replied that he had done so faithfully. Jesus then responded, “You lack one thing; go, sell what you have, and give to the poor, and you will have treasure in heaven; and come, follow me” (Mk 10:21 RSV).

Some Christians assume that Jesus, by telling this man to sell what he had and give to the poor, was giving a global command to all believers. Each of us should divest ourselves of what we own and give it away to those in need. Jesus, though, issued this extreme command to only one person in the Gospels, and I believe for a specific reason: This man was too attached to his possessions. They were standing in the way of the greater adventures God had for him--which included the joy of sharing what he had with others. These adventures also required a greater mobility on his part (“come, follow me”), which couldn’t occur as long as he was too preoccupied with taking care of the things in his life.

Even though this ruler recognized that Jesus was giving him the key to a happier and more productive life, he was unable to part with what he owned. “He went away sorrowful, for he had great possessions” (Mk 10:22 RSV). His is a tragic biblical example of how the endowment effect and loss aversion can prevent a person from experiencing Christ’s abundant life.

It’s interesting to contrast this man with Abraham. Like him, Abraham is described by Scripture as “very rich” (Gen 13:2). Yet Abraham was somehow able to stay detached from his possessions to a degree that was difficult for the young ruler. At the most unlikely age of 75, Abraham responded willingly when God instructed him, “Leave your country, your people and your father’s household and go to the land I will show you” (Gen 12:1)--even though this step meant a drastic change in lifestyle for him.

There is no evidence that God ever asked Abraham to divest himself of his riches. Instead, he was called to employ his wealth constructively, by giving employment and livelihood to an entourage of hundreds of people. Still, we never sense that Abraham’s security was wrapped up in what he owned, nor in his role as a benevolent employer; he was able emotionally to make significant sacrifices God asked of him, and not look back. He left the considerable comforts of his home setting in Haran--and all the expectations he had surely built up over a lifetime of living there--for the uncertain adventure of journeying toward Canaan.

When we consider Abraham and the rich young ruler together, we realize that God calls each of us to deal with our possessions in different ways. What’s critical is that we not allow our self-esteem to be based on what we own, nor on any of the attachments in our life. We need to be able to let go of any of them, in order to embrace God’s bigger picture for us. Abraham had this emotional capacity, and as such, he’s an inspiring role model to keep in mind at those times when letting go is necessary.

The Art of Letting Go

Abraham is revered as the father of faith in Scripture especially, I’m certain, because he was so unspeakably forward-looking. He was able to put his past behind him when necessary, and to take even gigantic steps of faith. This ability to let go may have come naturally for him. Most of us have to work at it. We too easily cave into loss aversion, and into the endowment effect tendency to overvalue certain things in our life that are well worth giving up for something better.

At those special times when God has a welcome new direction for us to take, certain practical steps can help us greatly to find the heart to move forward and not look back.

Focus on your gains more than your losses. We should make a concentrated effort at such times to focus more on what we’ll gain than lose by going ahead. This may take some mental discipline, especially if loss aversion is hitting us hard. We don’t normally imagine that such discipline is needed if the opportunity before us is one we’ve yearned for; why should we have to work at wanting it in this case? Yet we humans are complex psychological creatures, and, as we’ve noted, may dwell more on our losses than our gains, even in the face of a cherished opportunity. Making a deliberate effort to focus on the benefits we expect to reap is an excellent way to fight this tendency.

Try setting aside a few minutes each day, for as many days as necessary, to give thought solely to the advantages of taking the step before you. Think of this as a devotional time, and, in a prayerful spirit, dwell on these benefits, and enjoy the thought of experiencing them as fully as you can. Then, during the day, bring them to mind often and relish them.

If we’ve carefully thought through a decision, and initially felt joy at what seems to be the right path for us, focusing on what we hope to gain will help us greatly to recapture that joy and hold on to it.

Stir up your sense of adventure and excitement about risk. The endowment effect and loss aversion hit us most strongly when our thirst for adventure is low. As Paul Tournier points out in his classic, The Adventure of Living, we each have within us two competing instincts: one for security and one for adventure.* We humans more naturally long for security than adventure. The more security conscious we are, the more concerned we are with holding on to what’s familiar, rather than risk it for a less certain future, even when we suspect that something better is available for us.

There is risk involved any time we choose a new option for our life--the risk that it won’t deliver the benefits we’re hoping for. When our spirit of adventure is high, though, we find much enjoyment in taking this risk. And this excitement about risk is healthy for us, and life-giving, provided the risk we’re taking is reasonable.

Fortunately, there is much we can do to stir up our sense of adventure. It helps especially to think back over our life, and to recall those times when we felt happiest, most energized, and most confident our life was moving in a positive direction. We’ll usually find that they were when we were doing things that to us felt risky, yet which we strongly hoped would improve our life or help us better realize our potential. Recalling the elation we naturally felt during those periods will help to rekindle our sense of adventure for the decision that’s now before us.

It helps us too to recognize that the abundant life Christ promises us is much more about adventure than security. And following him often requires us to take steps that from our human point of view seem risky, yet by their nature are invigorating to us and cause us to feel most fully alive.

Seek friends, role models, and encouragers who have a forward-looking attitude about you. When I first considered beginning Nehemiah Ministries, in 1978, the idea was greatly appealing to me. Here was a chance to use my gifts for teaching and writing more fully than was possible in the pastorate, and to be of service within the body of Christ where I could be most helpful. Yet taking this step meant leaving a secure church position, a nice home in St. Louis, and having to raise support. For some time, I went back and forth about what to do.

I was fortunate to have several friends who encouraged me to do it. They were excited about the prospects of this new ministry. They assured me it was a good fit for me, and that the risks were worth taking. Without their cheering me on, I don’t know if I would have found the heart to go ahead.

It helped me as well to think of examples of others who had begun such an independent ministry and were successful. Their role models were inspiring to me, and strengthened my conviction that this step was doable for me.

Having such “cheerleaders” in our life when we’re considering a major change--who believe in us, see our possibilities, and are enthusiastic about our new dream--can make all the difference in our finding the courage to act boldly. Such encouragers come in many forms. They may be friends, family members or work associates who are simply there when we need them. Or they be specially-trained individuals whom we seek out for help--counselors, pastors, consultants or career advisors.

Alicia accepted Bob’s proposal of marriage ecstatically, with great conviction she had found her match. But within a short time her feelings began to vacillate; on some days the thought of marrying Bob seemed ideal, while on others she was dogged with doubt. Through the help of an insightful counselor, she resolved that her decision to marry Bob was itself strongly justified. Yet the counselor helped her recognize that she was also grieving the loss of certain freedoms she enjoyed as a single woman, and this accounted for her roller-coaster feelings. Once she understood the source of her mood swings, she was able to determine that the tradeoff in marrying Bob was well worth it. And with the counselor’s encouragement, she found the strength to go ahead and marry him.

If you’re in a similar situation, where mixed emotions are making it difficult to resolve an important decision or to stay committed to one you’ve made, seek the best help that’s available to you. This is the time to draw on the counsel and encouragement of friends who are there for you. It’s also the time to seek a professional’s help if you need it. God uses such people as his agents of grace in our life--to help us clarify our thinking, better understand ourselves, and find the heart to take the steps that are right for us.

Understand your psychological makeup. On a typical day, my enthusiasm for whatever I’m doing runs strongest in mid to late morning and in the evening; it’s less intense in the afternoon, and at low ebb in the early morning. In making decisions, I’ve long learned to trust my later-morning and evening judgment much more than how I feel in the early morning or afternoon.

Most of us go through cycles in how we look at our life that are fairly predictable. At certain times of the day--or at certain periods of the week, month or year--we’re optimistic; at these times, we focus naturally on what we’re gaining in our various pursuits, and on the benefits we hope to enjoy. At other times we focus more readily on what we’re losing. We can’t change our psychological makeup. But we can learn to account for it in making our decisions, and in re-affirming choices we’ve already made. Any steps we take to better understand how we function psychologically, and how our emotions typically “flow,” will help us to keep our bearings when our feelings fluctuate. We’ll know whether to take them seriously at a given time, or to discount them as part of our normal emotional cycle.

Generally, we should give much more weight to the conclusions we reach during our optimistic periods than during our down times. And in major decisions, we should give special credence to our general pattern of feelings over time.

Putting it All in Perspective

It’s a popular Christian belief that Christ gives us “perfect peace” any time he guides us to do something. If we’re walking in God’s will, in other words, we will feel completely peaceful about anything he calls us to do. This notion is well-meaning, but it’s an unfortunate over-simplification that often leaves Christians confused. If we experience any misgivings at all--even about an option that in most ways makes sense for us--we may still feel forced to conclude that God is “red-flagging” our choice and telling us not to go ahead.

The peace that Christ provides us, though, doesn’t necessarily eliminate our doubts and fears, but it gives us the courage to move ahead in spite of them. We may still feel anything but peaceful!

Being a Christian, in other words, doesn’t make us immune to human tendencies such as the endowment effect and loss aversion. In fact, we’ll almost surely experience them if we’re at all analytical in our temperament. Even in the face of a golden opportunity, we’ll still think plenty about the sacrifices it will require of us and the challenges we’ll likely face. The good news is that we can compensate for our humanness, and not allow it to hold us back at such times. Taking these four steps we’ve suggested will help us be able to commit to those dreams and goals that are truly right for us, and to stay the course toward them.

Or to say it differently, they will open us more fully to the peace Christ genuinely gives. With practice, we can learn to draw strongly on that peace, and to always find the courage to opt for the best God has for us.

And that’s the bottom line.
  

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