Comments on: You Can’t Judge An Action By The Result http://amateurassetallocator.com/2009/09/11/you-cant-judge-an-action-by-the-result/ Amateur Asset Allocator Tue, 22 May 2012 02:58:13 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Mike Piper http://amateurassetallocator.com/2009/09/11/you-cant-judge-an-action-by-the-result/comment-page-1/#comment-5315 Mike Piper Fri, 11 Sep 2009 12:53:13 +0000 http://amateurassetallocator.com/?p=2412#comment-5315 I find this topic fascinating in that people seem able to grasp it in some instances yet unable to grasp it in other instances (and both within the realm of personal finance). For example, people understand that it wasn't a waste to pay for life insurance last year even if they didn't happen to die. But at the same time, people deem their 401(k) contributions to have been a waste just because they've declined in value. Particularly interesting is that, at the end of it, the life insurance premium has no value, while the 401(k) contributions still have <i>some</i> value. I find this topic fascinating in that people seem able to grasp it in some instances yet unable to grasp it in other instances (and both within the realm of personal finance).

For example, people understand that it wasn’t a waste to pay for life insurance last year even if they didn’t happen to die.

But at the same time, people deem their 401(k) contributions to have been a waste just because they’ve declined in value.

Particularly interesting is that, at the end of it, the life insurance premium has no value, while the 401(k) contributions still have some value.

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