[The Psychology of Money #9] A single roulette wheel changed people’s answers. This was an experiment from 1974. The roulette wheel was rigged to stop only at 10 or 65. After showing participants the number, they were asked: “What percentage of UN member states are from Africa?” Those who saw 10 typically answered around 25%. Those who saw 65 typically answered around 45%. The roulette number had nothing to do with the question. This is anchoring. The first number you see sticks in your mind like an anchor, pulling your judgment toward it. The same thing can happen when a price tag prominently displays an “original price.” What was the last thing you bought, after being told, “It was originally this much”?

[Psychology of Money Guide #10] Here’s a coin toss proposal: If it’s heads, I give you 1.5 million KRW. If it’s tails, you give me 1 million KRW. The expected value favors you. But if we assume loss hurts twice as much as gain, The joy of winning is 150, The pain of losing is 200. The math flips. This is called loss aversion—the tendency to feel losses more intensely than equivalent gains. Is it exactly twice as painful? In 2024, analyzing 150 papers and 607 estimates, the average came out to roughly double. However, the median was around 1.7 times, indicating variation across studies. To be precise, we should say: “Losses are generally about twice as painful.”

Bitcoin uptober?

When you have cash, fear stops you from buying; when you think it’s the right time, you don’t have any cash.

Install RiPay on Apple Pay, add around 500,000 KRW, set up automatic payment for the AI subscription, and you might be able to use it for life lol

In 2018, Venezuela experienced an annual inflation rate of 1,360,000 percent. This means that what was originally worth 10,000 won became worth approximately 130 million won after just one year. In effect, the currency lost all meaning. Nearly 90% of the population fell below the poverty line that year. This occurred in a country with the world’s largest proven oil reserves— not due to a lack of resources, but because the government resorted to printing money to cover its budget deficits.

Zimbabwe, 2008. Prices doubled every 24.7 hours. This wasn’t just a one-time jump—like a 4,500-won coffee becoming 9,000 won the next day— It happened almost every single day. In July of that year, the annual inflation rate was reported at 231,000,000%. Eventually, the Zimbabwean government actually issued banknotes worth 100 trillion dollars. 100,000,000,000,000. Yet, at the time of issuance, that note was worth only about 15,000 Korean won. The number on the bill read “100 trillion,” but its actual value was barely more than a single 10,000-won note. The currency unit itself had become meaningless.

The most dramatic inflation in human history occurred in Germany 100 years ago. In 1921, a single loaf of bread cost 163 marks. By November 1923, just two years later, the same loaf cost 200 billion marks. That’s an increase of 1.25 billion times. The price of newspapers was even worse: In 1922, one cost 0.3 marks; by the end of 1923, it cost 1 million marks. In less than a year, it rose 3 million times. At the time, Germans rushed to the store immediately after receiving their paychecks— because if they left their money in the bank for just one day, by the next morning it could buy nothing at all. Banknotes were worth less than firewood. So people literally burned money to keep warm. This was the most extreme example ever of how paper bearing numbers holds no intrinsic value.

The money released during the pandemic flowed into asset markets. Seoul apartment prices surged by 30–50% between 2019 and 2021. The KOSPI rose from its 2020 low of 1,439 to 3,305 in 2021—more than doubling in just one year. Here’s who won and who lost over those two years: Homeowners: Asset values rose 30–50%. Stockholders: Asset values doubled. Non-homeowners: Faced higher rent and deposit burdens. Cash holders: Lost purchasing power. During the same period, in the same country, outcomes varied completely based on position. Those who simply saved money in their bank accounts suffered the greatest losses.

Many of the coins from 2017 no longer exist. But few talk about that. People only look at what’s still here and say, “I should’ve bought back then.” That’s survivorship bias. Since the failed ones can’t speak, only the success stories of the survivors are loudly heard. Even Bitcoin’s survival to this day is often misunderstood in the same way. “Survived until now” and “Will survive going forward” are two different statements.