The Slice

The case for doing so was pretty solid:

• I live 5 minutes from my office—and about half the time I bike or walk anyway.
• We already have an SUV for longer trips.
• The Prius is half the purchase price, cheaper to insure, and cheaper to fuel.
• And the Volvo didn't bring me that much joy, give or take a few features (I'll get to that in a minute).

It was still hard to do. Why?

The Volvo was fun to drive. Maybe a little too fun—I got pulled over twice in three years (luckily, got off with warnings). It was also feature rich. It had a heated steering wheel, built-in booster seats for the kids, and a feature that massaged your butt while you drove. And while I rarely used this feature, it was there. And I could use it.

Then, there was the professional angle. At a prior firm, I remember sitting in a sales meeting where one of the executives told the group that if you want to work with wealthy clients, it doesn't hurt to drive a Mercedes. He was probably not wrong — optics do play a role in this business. Would driving a more modest car cost me clients?

Maybe, but I think my biggest hang-up is that nobody likes to go backwards. Try drinking a Miller Light right after a Sam Adams and see if you disagree. Giving something up—even something you don't use—feels like a signal. Your brain starts asking uncomfortable questions: Are things just going to get worse from here? No more butt massage while I drive? What's next, rice and beans every night?

As it turns out, there's some economic theory behind this. In 1979, Daniel Kahneman and Amos Tversky proposed that our sense of well-being is based not on absolute wealth, but on changes relative to a reference point. A $100,000 salary feels great to someone who made $70,000 last year — and disappointing to someone who made $130,000. Kahneman would go on to win the Nobel Prize for this work in 2002 (Tversky died prior to the medal being awarded).

For me, the reference point was the Volvo. The Prius, however sensible, was decidedly below that. I was trading down.

Why "going backwards" hurts more than it should

Kahneman and Tversky went on to theorize that losses hurt about two times more than gains of the same amount. Said differently, for the risk of losing $1, I would need to see upside of at least $2.

For me, I wasn't just getting a “lesser” car. I was losing ground, and that triggers a categorically different emotional response than simply "having less."

I'm not saying any of this to shame anyone for driving a nice car. For some people, cars genuinely bring joy. Longer commutes change the math. I get it.

The larger point is this: when you're facing a decision that raises the cost of maintaining your lifestyle — no matter how small — it's worth considering the cumulative weight of never going back. Because often, you won't.

And for any clients who assume their advisors are financial monks, immune to the same decisions they face: we're not.

The Prius, for what it's worth, is actually pretty fun to drive. I see Christy borrowing it from time to time, which is something that didn't happen with the Volvo.  The fill-ups have been cheaper and less frequent, and so far, no speeding tickets!