Episode: Sunk Costs, Opportunity Costs, and Thinking in Terms of Expected Value

Have you ever kept going with something—even when you knew it wasn’t worth it—just because you’d already invested so much time, money, or effort? That’s the sunk cost fallacy at work.

In this episode of The Grow Your Wealthy Mindset, Dr. Elizabeth Chiang explores how sunk costs, opportunity costs, and expected value shape our financial and life decisions. Drawing insights from Annie Duke’s Quit: The Power of Knowing When to Walk Away, you’ll learn how to make more rational choices—whether it’s deciding to attend a rainy concert, stick with a struggling investment, or stay in an unfulfilling job.

You’ll learn:

• What the sunk cost fallacy is—and how it sneaks into your investing and daily choices
• Why we often “throw good money after bad” and how to stop doing it
• How opportunity costs help you see what you could be gaining elsewhere
• How to use expected value thinking to make smarter, more objective decisions
• Real-life examples from investing, research projects, and career choices

Understanding these concepts can help you step back, evaluate your options more clearly, and walk away from what’s no longer serving you—financially or personally.

Mentioned in this episode:

• Quit: The Power of Knowing When to Walk Away by Annie Duke
• Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke

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Get 12 Financial Mistakes that Keep Physicians from Building Wealth at https://www.growyourwealthymindset.com/12financialmistakes

If you want to start your path to financial freedom, start with the Financial Freedom Workbook. Download your free copy today at https://www.GrowYourWealthyMindset.com/fiworkbook

Dr. Elisa Chiang is a physician and money coach who helps other doctors reach their financial goals by mastering their money mindset through personalized 1:1 coaching .

You can learn more about Elisa at her website or follow her on social media.

Website: https://ww.GrowYourWealthyMindset.com

Instagram https://www.instagram.com/GrowYourWealthyMindset

Facebook https://www.facebook.com/ElisaChiang

https://www.facebook.com/GrowYourWealthyMindset

YouTube: https://www.youtube.com/c/WealthyMindsetMD

Linked In: www.linkedin.com/in/ElisaChiang

Disclaimer: The content provided in the Grow Your Wealthy Mind...

This week, we’re diving deeper into spending—what truly counts as a need versus a want, and how to make sure your spending reflects your values and supports your financial goals.

Even high-income earners can struggle to save when lifestyle inflation creeps in. In this episode, we’ll explore how lifestyle inflation happens, how to recognize it, and how to shift toward mindful spending that brings lasting fulfillment.

You’ll learn:

· How to tell the difference between needs and wants

· Why lifestyle inflation sneaks up on so many physicians

· How hedonic adaptation affects your happiness and spending

· How to spend intentionally on what truly matters to you

Your money should support the life you want—today and in the future. Tune in to learn how to make spending choices that align with your values and bring more meaning, freedom, and joy to your financial journey.

References:

https://www.census.gov/library/publications/2024/demo/p60-282.html

https://www.nerdwallet.com/article/finance/data-2023-budgeting-report

Please subscribe and leave a review on your favorite Podcasting platform.

Get 12 Financial Mistakes that Keep Physicians from Building Wealth at https://www.growyourwealthymindset.com/12financialmistakes

If you want to start your path to financial freedom, start with the Financial Freedom Workbook. Download your free copy today at https://www.GrowYourWealthyMindset.com/fiworkbook

Dr. Elisa Chiang is a physician and money coach who helps other doctors reach their financial goals by mastering their money mindset through personalized 1:1 coaching .

You can learn more about Elisa at her website or follow her on social media.

Website: https://ww.GrowYourWealthyMindset.com

Instagram https://www.instagram.com/GrowYourWealthyMindset

Facebook https://www.facebook.com/ElisaChiang

https://www.facebook.com/GrowYourWealthyMindset

YouTube: https://www.youtube.com/c/WealthyMindsetMD

Linked In: www.linkedin.com/in/ElisaChiang

Disclaimer: The content provided in the Grow Your Wealthy Mind...

Have you ever wondered how much you should be spending on housing, groceries, cars, or fun? This episode breaks down how to create a realistic and values-based spending plan that fits your lifestyle and financial goals.

Whether you’re creating your first spending plan or re-evaluating where your money goes each month, this episode will help you understand how to balance your spending between needs, wants, and savings—and how to adjust that framework to fit your own circumstances.

You’ll learn practical tips for evaluating your current spending, how taxes and deductions affect your take-home pay, and what percentage of your income you might want to allocate to housing, transportation, and other categories.

🧭 In This Episode, You’ll Learn:

• How to analyze your past spending to build a realistic budget
• The difference between needs, wants, and savings
• How to apply (and adapt) the 50/30/20 rule to your own finances
• Why your take-home income—not your gross income—is the key to building a sustainable plan
• How to think about big expenses like housing, cars, and insurance
• Why every spending plan should reflect your personal values and long-term goals

💡 Key Takeaways:

• Your ideal spending plan depends on your goals, lifestyle, and location.
• Start by tracking your current spending before deciding what to change.
• Keeping your needs at 50% or less of your take-home pay gives you flexibility.
• Saving and investing at least 20% of your income is key to long-term financial freedom.
• Spending on wants—guilt-free—is part of a healthy financial mindset.

Please subscribe and leave a review on your favorite Podcasting platform.

Get 12 Financial Mistakes that Keep Physicians from Building Wealth at https://www.growyourwealthymindset.com/12financialmistakes

If you want to start your path to financial freedom, start with the Financial Freedom Workbook. Download your free copy today at https://www.GrowYourWealthyMindset.com/fiworkbook

Dr. Elisa Chiang is a physician and money coach who helps other doctors reach their financial goals by mastering their money mindset through personalized 1:1 coaching .

You can learn more about Elisa at her website or follow her on social media.

Website: https://ww.GrowYourWealthyMindset.com

Instagram https://www.instagram.com/GrowYourWealthyMindset

Facebook https://www.facebook.com/ElisaChiang

https://www.facebook.com/GrowYourWealthyMindset

YouTube: https://www.youtube.com/c/WealthyMindsetMD

Linked In: www.linkedin.com/in/ElisaChiang

Disclaimer: The content provided in the Grow Your Wealthy Mind...