1712: The Surprising Reason Why People Cling to Jobs and Investments Longer Than They Should by Afford Anything

Optimal Finance Daily - Financial Independence and Money Advice

Optimal Living Daily LLC

Investing, Business, Education, Self-improvement

4.4 • 1.3K Ratings

🗓️ 16 November 2021

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Paula Pant of Afford Anything tells us the surprising reason why people cling to jobs and investments longer than they should Episode 1712: The Surprising Reason Why People Cling to Jobs and Investments Longer Than They Should by Afford Anything Paula Pant is the founder of the award-winning website AffordAnything.com and a writer and speaker specializing in money, business, and real estate investing. She is a real estate investor, as the owner of seven rental property units in metropolitan Atlanta. She holds a real estate license in Georgia. She's also the host of the Afford Anything podcast. The original post is located here: https://affordanything.com/sunk-cost-fallacy/ Visit Me Online at OLDPodcast.com Interested in advertising on the show? https://www.advertisecast.com/OptimalFinanceDaily Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	This is Optimal Finance Daily episode 1712, the sunk-cost fallacy,
0:05.8	the surprising reason why people cling to jobs and investments longer than they should,
0:10.8	by Paula Pant of affordanything.com, and I'm your host and personal finance enthusiast, Diana
0:17.3	Mariam. Now let's get right to it and continue optimizing your life.
0:21.3	The sunk-cost fallacy, the surprising reason why people cling to jobs and investments longer than
0:32.2	they should, by Paula Pant of affordanything.com. Imagine that you bought a $100 ticket to a ski resort
0:40.3	in Michigan. A few days later you find a $50 deal for a ski resort in Wisconsin. The $50
0:48.4	deal promises better ski slopes, nicer snow, and an all-around more fun experience.
0:54.3	On impulse, you buy that ticket too. Then you learn that the two ski tickets are valid only on
1:00.3	the same day. Bummer. The tickets are non-refundable and non-transferable. Other costs are equal.
1:08.0	You'll spend the same money and time traveling to Michigan or Wisconsin.
1:12.9	Imagine that you have no emotional connection to either state, no family or friends live there.
1:18.6	Your face with a certain loss. You have to sacrifice either the $100 Michigan ticket
1:24.1	or the $50 Wisconsin ticket. Which one would you choose?
1:28.5	Researchers Hal Arches and Catherine Blummer posed this question to a team of research subjects.
1:34.3	The majority said they'd sacrifice the $50 Wisconsin ticket, even though it promised
1:40.0	the more fun experience. Why? Loss aversion. Most people prefer to minimize their losses,
1:48.4	even if it means enduring a subpar experience. This is known as the sunk-cost fallacy.
1:55.6	People reflect thinking along the lines of this fallacy when they say,
1:59.6	well, I've already sunk this much money or time into it. I can't stop now.
2:04.8	Would you spend your last million on a plane?
2:08.4	The same researchers divided people into two groups. They posed this question to group A.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Optimal Living Daily LLC, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Optimal Living Daily LLC and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.