If You Wouldn't Buy It, Sell It!

Are you familiar with the sunk cost fallacy? Sometimes when someone has already devoted a certain amount of time, money, or attention to a project, they'll feel obliged to continue doing so, even if the project is failing.

This fallacy shows up a lot in personal finance. For example, suppose someone dies and leaves you their fancy BMW sedan. If you wouldn't have bought that car, the reasonable thing to do is to sell it and invest that money somewhere else.

Similarly, suppose you bought a pair of skis with the intention of taking up skiing, but didn't. Sell 'em!

Generally speaking, if you own an asset that you wouldn't have bought now, don't just leave that money tied up—sell it off and put that cash to a better use.

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