Archive for June, 2009

Hyper-Correcting for the Sunk-Cost Fallacy

Tuesday, June 23rd, 2009
Hyper-Correcting for the Sunk-Cost Fallacy

Here's a classic litmus test for the sunk cost fallacy: You bought a ticket for a show.  The night arrives and you just don't feel like going. Do you go anyway, so as not to have wasted the money on the ticket? Probably you shouldn't. Your current decisions should not be influenced by money that is... »

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Throwing Money Away (Buying vs Renting)

Monday, June 1st, 2009
Throwing Money Away (Buying vs Renting)

I’m tired of hearing people explain that paying rent is throwing money away. Of course, they don’t mean that literally. You’re getting something for that money (a place to live). But with a mortgage you’re building equity, right? Doesn’t that fundamentally make more sense than renting? No. “Building equity” just means turning some of your money into a... »

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Posted in Uncategorized | 64 Comments »