Dollars and Sense

Two of the ideas you’ll keep

The Clif summary of Dollars and Sense pulls out 7 insights. Here are the first two.

1. Every purchase has an opportunity cost: buying anything means giving up everything else that money could do, yet we almost never picture those alternatives. Ariely's dealership research found car buyers could barely name what they'd sacrifice for the purchase.
2. We can't judge absolute value, so we lean on relativity, which is why retailers use decoys and anchors, like adding a pricier bread maker to lift sales of the cheaper one beside it.

The other 5 — and the full 12-minute summary — are in the app.

What’s inside: 9 chapters

The whole summary runs about 12 minutes, read or listened to.

1. What Is Money, Really? The Opportunity-Cost Blind Spot
2. We Forget That Everything Is Relative
3. We Compartmentalize: The Mental-Accounting Trap
4. We Avoid the Pain of Paying
5. We Anchor and Trust Ourselves Too Much
6. We Overvalue What We Own and Confuse Effort With Value
7. The Magic of Language, Rituals, and Expectations
8. We Lose Control in the Moment
9. Thinking Better About Money