Comfort 2 Growth

One of my biggest expenses is food. I love to eat! Especially Sushi.

Choosing to eat out can easily cost you $200-300 a month. This figure can vary greatly, depending on your frequency and price range. After it is said and done, there is  simply a premium in  having someone else prepare your food and clean up after you.

Unfortunately, albeit logically, when eating fast food you sacrifice quality and nutritional value for price and convenience. The U.S. culture is addicted to convenience and it is making the majority of our citizens obese.

It seems that a lot of people avoid cooking because it is too intimidating and eating out seems a lot more of a comfortable option.

However, by learning to cook your own meals you can save your bank account and your waist line… Read more…

How do you decide to spend your time, money or other resources?

People tend to be loss averse. Meaning that we do not want to waste our resources, or feel like we are.

We often form emotional attachments to our decisions and commitments. For example, if you spend a significant amount of time on a project, an emotional attachment to this project will begin to form. This isn’t a bad thing, it just happens. We tend to form bonds with the things that we spend our resources on.

We feel compelled to recover our investment, even if it requires spending MORE money, time or happiness.

From an economists point of view, this emotional attachment to a past cost can be irrational, illogical and negatively affect our future. This has been coined as the Sunk Cost Fallacy.

The idea is that the past, or previous investment, should not be considered when making a decision. It is a sunk cost, it has already been incurred. Since it can not be recovered, it should not factor in to the decision.

There are only two things that should be considered. Current and future costs and benefits.

For example, Imagine you are half way through watching a movie and realize it is terrible.  If you force yourself to continue and finish the movie because you had already spent time/money on it, you would be committing the sunk cost fallacy. You could be investing your time on something better.

Trent at The Simple Dollar, explains it better than I do in this article.

This emotion based fallacy can often be seen in dysfunctional relationships. When an unhappy couple stays together longer because they’ve been together for so long already. They allow their fear of feeling like they’ve waste their time to make them waste even more time.

Moral of this story: Make now-based decisions. Ask yourself: Is this the best decision to make now? Will the next course of action or investment required worth the risk and subsequent benefit?