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... »
Tags: economics,
fallacies,
rationality,
sunk costs
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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... »
Tags: economics,
fallacies,
housing bubble,
investment,
real estate,
rent
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