Episode 108: [Toolbox] How the Sunk Cost Fallacy Messes with You

In this episode, we ask: What is the sunk cost fallacy? What is loss aversion? What is the status quo? Are you knee-deep in something? What did Christopher Olivola say? Do you ever sit through a movie you don’t like? Do you ever finish a low quality book? What did the Journal of Behavioral decision...

In this episode, we ask:

What is the sunk cost fallacy?
What is loss aversion?
What is the status quo?
Are you knee-deep in something?
What did Christopher Olivola say?
Do you ever sit through a movie you don’t like?
Do you ever finish a low quality book?
What did the Journal of Behavioral decision making say?
Have you ever risked your life to attend an event?
Have you done this in relationships?
Can you get your lost money back, by throwing more money at it?
Do you throw good money after bad?
Do you double down on loser stock?
How do you move on?
How does this work in investment portfolios?
Is it better to cut your losses or stick it out?
How long do you have to wait for recovery after a market drop?
Do 50% market drops ever happen?
How long are you willing to wait?
What about 10% drops in the market?
How long before you break even?
How do averages mess with your portfolio?
Have you had someone say “don’t look at your 401(k)”?
Where are you falling for the sunk cost fallacy?
Will taxes go up in the future?
Are you contributing to tax-postponed retirement accounts?
What would be a better environment for retirement savings?
What about surrender charges?
What about indexed universal life products?
Are you paying more costs?
Do you want to continue to pay the fees?
Are you working with a professional?
Are you working with a specialist?
Do you have a gut feeling that something is off with your current structure?
Can you see the expenses on a whole life policy before you sign up?
Have you heard Episode 36?
Are you sticking with the plan even though it no longer serves you?
What is the real problem?
What is the cost of inaction?
Have you heard Episode 99?
Can you see the logical fallacy?
Have you written a pro and con list?
Should you take action?
Have you gone through the fear setting exercise in Episode 99?
Do you set goals in advance?
What are SMARTER goals?
What costs are you willing and not willing to endure?
As a thought exercise, have you dropped in to your current life, as an outsider?
Can you avoid more loss?
Are your decisions rational?
Are your decisions emotional?
Where is the sunk cost fallacy showing up for you?