2023-02-03

• Did something last night I almost never do. I went out to a bar for beers. Shocking stuff, I know. The impetus here was to see old friends. Some coworkers from Wealthfront, my first job, had organized a gathering for folks who live in NYC. Ended up only being two of us there: Scott and Pal. While it would have been great to get a bigger crowd of ex-WFers, seeing these two homies was awesome. A real reminder that Wealthfront was an exceptional place to start my career. Not only was that crew incredibly skilled at work stuff, but also so much fun to be around. Looking back at my time at Wealthfront, there’s a strong sense of “you don’t know you’re in the good ol days when they are happening” vibe. It was a really special time with very special people. I almost dediced not to go last night because bars/beers are not historically a strong suit for my social life and the event was pretty far from home (40 mins by train). But I’m really glad I went. Great times.
  
• Also, more reflections on NYC apartment hunting and the way cognitive biases can show up. This time, loss aversion. We found a place we are pretty excited about. It’s very nice. I visited it this past weekend and thought it was something like 80th percentile overall. Elena and I talked about it and given our target move-in date is pretty far out, we decided we didn’t need to jump at this one. But then, things changed. On Tuesday, the broker emailed me asking “what did you think of the place?” Interestingly, this triggered a re-evaluation of the apartment. We decided that while we didn’t need to jump at it aggressively, there is some price point at which we would take this place today. So we deliberated and came up with terms we thought we be compelling. The terms ended up being something like 10% off what the unit was going for. Then we sent them to the broker. An interesting thing happened in the course of coming up with terms. We seemed to become more and more attached to the place the more we thought about it. We started envisioning our lives in this new space and how wonderful it would be. Then, loss aversion showed up as the flip side to these positive dreams. We started having thoughts like “oh no, are the terms we sent going to make it so we lose out on this apartment?” And the thought of losing the apartment became heavily conflated with the thought of losing some beautiful future together. We started to doubt our earlier decision to strike a hard bargain with the broker. We found ourselves wondering “maybe we should have just paid the exorbitant fees…”. Thoughts like this gnawed at us. Let’s pause here and reflect on the craziness of this situation. We are exhibiting strong loss aversion, for an apartment we have never lived in and didn’t feel super strongly about after visiting it. I think this is pretty wild. Now, it’s not surprising that there would be some amount of psychological pendulum swinging in these situations. What’s surprising is the magnitude of the swings, and the short timeframe in which these big swings occur. Fortunately, we managed to step outside the loss aversion. We did this by calling it out by name and being explicit about beliefs that push back on the extremeness of our loss-averse ideas. It’s important in any nyc housing search to remember certain key ideas. Here’s one that is helpful: Your happiness is indeed affected, but is not totally dependent, on what apartment you live in. If you doubt this, you are forgetting large swaths of agency you have to build a life that you find compelling. Another one that’s helpful would be: There are literally millions of apartments in this city. If you have a long enough time horizon for your search, you will almost certainly find another that is at least as compelling as whatever you are looking at now. It’s not trivial to remember these things, particularly in the midst of big, psychological pendulum swings. But it is nice to see that as I get older, I seem to be getting somewhat better at recognizing these things and giving myself the time and space to question extreme positions and refocus my attention on foundationally important beliefs.

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