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Optimism bias is the natural tendency to overestimate the likeliness of positive outcomes and underestimate negative ones.
Negativity bias can cause us to subconsciously exaggerate the impact of market downturns in our minds and overreact to perceived financial dangers.
Due to hedonic adaptation, many spend most of their adult lives buying bigger, fancier, and nicer things.
The sunk cost fallacy describes the human tendency to keep doing something we have started, even if it isn’t working out.