if the income growth after getting an MBA is the same as before getting the degree, getting an MBA does not pay off financially

even if we save nothing to finance education over 8 years before getting the degree, getting an MBA is financially beneficial 

Given the template assumptions, getting an MBA is financially beneficial 

If the scholarship is 10% or less of the entire cost of the program, getting an MBA does not pay off financially

despite declining real estate prices, the mortgage is a more profitable option than renting

if return on stocks is 8% per year, then renting becomes a more profitable option

rent payment is greater than the mortgage payment

total interest paid is about 55 EUR

outstanding loan balance at the beginning of 6th month is about 595 EUR

total amount of payment is about 1055 EUR

the interest is fully repaid by the 10th month

If you choose to rent, and invest available capital and saving in stocks, in 30 years you will have less in stocks than the market value of your apartment

if return on real estate is 0%, then renting becomes a more profitable option

given these assumptions, purchasing the apartment is more profitable than renting

If you choose to rent, and invest available capital and saving in stocks, you will have about 286000 EUR in stocks after 30 years

After suffering a loss in a round, normal participants invested only about 40% of the time, while the target group continued investing about 85%

Normal participants became more conservative over time, investing in fewer rounds as the game progressed

Normal participants invested about 60% of the time overall, while the fear-free target group invested about 85%

Normal participants performed better because their fear helped them avoid bad bets

It forces people to immediately cut their current spending by a large amount

Once enrolled, saving increases happen automatically (autopilot), exploiting inertia in people's favor

Savings increases are timed with pay raises, so people never feel their spending is being cut

People commit to saving more in the future (not today), taking advantage of the fact that self-control feels easier for future decisions

From an evolutionary perspective, a fast fear response made sense (low cost of false positive vs. fatal cost of false negative), but this same mechanism works against us in financial markets

Fear drives people to ignore bargains in the stock market, especially after they have just suffered a loss

Our brain's emotional system (X-system) reacts about three times faster than the logical system (C-system), so fear overrides rational analysis

Fear is always irrational and has no useful purpose in any situation

Automatic, fast, and largely unconscious

Always producing the correct answer in modern environments

Based on mental shortcuts (heuristics)

Deliberate, effortful, and logical

Nine out of ten either could not save, chose not to, or saved too little

About one half

About half a percent felt they were saving too much

About one third were saving through a 401(k), but only about 1 in 10 were saving enough

That people plan to make good choices in the future (bananas) but give in to temptation in the present (chocolate)

That most people prefer chocolate over bananas at all times

The concept of present bias -- self-control is not a problem in the future, only when temptation is right in front of us

That people make unhealthy food choices because they lack nutritional knowledge