Rolf Dobelli - The Art of the Good Life: 52 Surprising Shortcuts to Happiness, Wealth, and Success

How to Turn a Loss into a Win

I should have known. Shortly before the motorway exit in Bern, theres a gray speed camera that lies in wait for unwary drivers. Its been there for years. No idea what I was thinking. The flash jolted me out of my reverie, and a quick glance at the speedometer confirmed my fears: I was going at least 10 mph too fast, and there was no other car for far and wide, nobody else I could pin the flash on.

The next day in Zurich, I watched from a distance as a police officer tucked a ticket underneath the windscreen wiper of my car. Yes, I was parked illegally. The car park was full, I was in a rush, and finding a legal parking space in central Zurich is like finding a deckchair in the Antarctic. For a moment I considered running over. I pictured myself standing in front of the officer, gasping for breath, hair disheveled, trying to make him understand my dilemma. But I let it go: years of experience have taught me that such things only make you feel silly. You look small, and you end up losing sleep.

Parking tickets used to infuriate me. These days I pay them with a smile. I just debit the sum from the account Ive earmarked for donations. Each year I set aside 10,000 francs for good causes, and I pay all my fines out of that. In the world of psychology, this simple trick is known as mental accounting. I borrowed it from Richard Thaler, one of the founding fathers of behavioral economics. Mental accounting is considered a classic logical fallacy. People treat money differently depending on where its coming from, so if you find money on the street, you treat it more casually and spend it more quickly and more frivolously than money youve actually earned. The parking-ticket example illustrates how you can turn this logical fallacy to your advantage. Youre deliberately tricking yourselffor the sake of your own peace of mind.

Say youre traveling in an impoverished country, and your wallet disappears. Minutes later you find it again, and all thats missing is the cash. Do you see this as theft, or as a donation to somebody whos probably far worse off than you are? No amount of mental gymnastics will alter the fact that your money was stolen, but the significance of what happened, the interpretation of the event that you can influence.

Living a good life has a lot to do with interpreting facts in a constructive way. I always mentally add 50 percent to prices in shops and restaurants. Thats the amount this pair of shoes or sole la meunire will actually cost metaking income tax into account. If a glass of wine costs 10 dollars, Ill have to earn 15 in order to afford it. For me, thats good mentalaccounting , because it helps me keep my expenditure in check.

I prefer to pay for hotels in advance. That way I wont spoil a romantic weekend in Paris by being confronted with the bill at the end. The Nobel Laureate Daniel Kahneman calls this the peakend rule: you remember the high point and the end point of your holiday, but the rest is forgotten. Well take a closer look at this effect in . If the end of the trip is a big fat bill, presented to you like marching orders by a snooty French receptionist and complete with mysterious extras he has probably added on purpose (to punish you for not speaking accent-less French), your memory of the romantic getaway will be forever tarnished. Precommitment, they call it in psychology: pay first, consume later. Its a form of mental accounting that takes the sting out of payment.

I pay taxes with equal nonchalance. After all, I cant upturn the taxation system single-handed. So I compare what I get in return for my money in the lovely city of Bern with cities like Kuwait, Riyadh, the jam-packed concrete wasteland of Monaco or the surface of the moonall places without income tax. Conclusion? Id rather stay in Bern. People who move to ugly cities for tax reasons make themselves seem petty and stubbornnot exactly solid bedrock for a