Episode Details

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.

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