Comments by "" (@Green__one) on "5 Ways People Are Dumb With Money" video.

  1. Their sunk cost fallacy isn't completely right. What you need to mention is that it's only a fallacy if you wouldn't pay money to replace it. i.e. if you rent a bad movie, and watch it vs doing nothing, that's the sunk cost fallacy, but if the alternative is renting another movie because you didn't like the first, that's worse as you're spending more money than in the first case. Now in the movie example, it's probably worth just walking away from your lost money. But in a meal example at a restaurant, it's often worth having the bad meal, so you aren't hungry and pay for a second meal later. (From a purely economic standpoint. From the point of view of enjoyment or pleasure this may not be the case, and that too should be taken in to account.) I also have a small issue with their description of how "extra" money is handled. Yes money is, and should, be fungible. But if you're accounting properly, and have already covered your normal "buckets" of money with money from other sources, then treating yourself with any "extra" money you have isn't a bad thing. Of course you have to make sure you HAVE covered all your expenses (including funding for things like retirement and such) But if you've done all that, then it's not "dumb" to do something that makes you happy with extra money you weren't expecting.
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