Sunk costs are expenses that cannot be recovered or reversed, such as the purchase of tickets or a car. Financial planners focus on potential costs when making decisions involving money management. Also known as stranded costs, sunk costs are any expenses or costs incurred in the past and cannot be recovered or reversed. Although sometimes […]
The sunk cost fallacy is when prior investment is used as a reason to continue a course of action, even if it’s not rational. Sunk costs cannot be recovered and should not influence decisions. It can lead to commitment escalation and is sometimes a misinterpretation of decision-making processes. The sunk cost fallacy is a logical […]
Sunk costs are expenses that cannot be recovered or reversed, such as the cost of buying tickets to a sporting event or a new car. They are not a factor in budgeting or decision-making, as they only exist after a purchase has been made. Financial planners focus on potential costs instead. Also known as stranded […]
