13. Endowment Effect: - Deepstash
13. Endowment Effect:

13. Endowment Effect:

People tend to overvalue items simply because they own them. If someone offers you less money for a used item than you think it's worth, you might refuse to sell it because you value it more due to ownership.

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alexbene

Being an ambivert person, I am too much fond of reading, and always eager to learn.

These cognitive biases and mind traps influence decision-making, perception, and behavior in various aspects of our lives. Recognizing them can help us make more rational and informed choices.

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12. Loss Aversion:

12. Loss Aversion:

We fear losing what we have more than we desire gaining something new. You might refuse to sell a losing stock because you don't want to accept the loss, even if it's a wise financial decision.

The “disposition effect”

It's a bias related to money and it describes how investors hold on tight to losing assets. The driving force behind this behavior is our fear of regret.

It shows we are very hesitant to sell an asset at a loss and we tend to hang on to it as it keeps dropping in value, hoping it will pi...

Saving versus spending

Saving money now is worth more than spending money later. This advice applies to any budget item that you could spend less on now.

Even if it is a really great deal, remind yourself that cash in hand now is worth more than an unnecessary purchase.

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