Go offline with the Player FM app!
Ep.223 The Endowment Effect: Why You Overvalue What You Own
Manage episode 488130127 series 3602431
The Endowment Effect: Why You Overvalue What You Own
You list your old chair on Facebook Marketplace for $200.
Everyone offers $50.
You think, “This is a steal—why don’t they see it?”
That’s the endowment effect—a mental bias where we overvalue what we already own, just because it’s ours.
It shows up in investing too:
- You keep a bad stock because “it’ll bounce back.”
- You hold a business idea long after it stopped working.
The fix?
Ask yourself: If I didn’t own this already, would I buy it today?
If the answer is no, it’s probably time to let go.
Smart investors don’t get attached.
They get objective.
311 episodes
Manage episode 488130127 series 3602431
The Endowment Effect: Why You Overvalue What You Own
You list your old chair on Facebook Marketplace for $200.
Everyone offers $50.
You think, “This is a steal—why don’t they see it?”
That’s the endowment effect—a mental bias where we overvalue what we already own, just because it’s ours.
It shows up in investing too:
- You keep a bad stock because “it’ll bounce back.”
- You hold a business idea long after it stopped working.
The fix?
Ask yourself: If I didn’t own this already, would I buy it today?
If the answer is no, it’s probably time to let go.
Smart investors don’t get attached.
They get objective.
311 episodes
All episodes
×Welcome to Player FM!
Player FM is scanning the web for high-quality podcasts for you to enjoy right now. It's the best podcast app and works on Android, iPhone, and the web. Signup to sync subscriptions across devices.