Why the Math that looks Simple usually isn’t

We just got back from holidays, and I have a story that perfectly captures why so many of us make bad financial decisions while feeling completely rational about it. It’s about a rental car in Morocco, but really it’s about everything: how we think about money, ownership, and the hidden costs that derail our best-laid plans.

Picture this: You’re staying in a villa 40 minutes outside Marrakesh. A taxi ride back and forth costs €70. Renting a car costs €25 per day. The math seems laughably simple, right? Of course you rent the car! You’d have to be financially illiterate not to see that €25 beats €70.

But here’s the thing about simple math: it’s almost never actually simple.

The Hidden Costs Start Immediately

First, that €25 doesn’t include gas. Suddenly your “free” rides aren’t free anymore. Each trip to the city center costs fuel, which in Morocco (or anywhere, really) adds up faster than you’d expect.

Second, and this is where it gets psychologically interesting: not everyone in our holiday group actually drives. My wife doesn’t drive. Her sister doesn’t. Several others in our party don’t. When you take a taxi, the chauffeur service is obvious, that’s literally what you’re paying for. But when you rent a car and someone else drives, somehow that service becomes invisible.

This isn’t a gendered thing, by the way. It’s a psychological quirk. The person doing the driving provides exactly the same service as a taxi driver, but because money didn’t explicitly change hands in that moment, we (well, definitely the person who is not driving) don’t “see” the cost. We’ve made the driver’s time and stress magically disappear from our mental accounting.

And let’s be honest: nobody enjoys driving in Marrakesh. The traffic is chaos, the roads are unfamiliar, and you’re on vacation trying to relax. Yet somehow we convinced ourselves that doing this stressful thing ourselves was “saving money.”

The Usage Trap

Here’s where the math gets really tricky: the rental cost is fixed, but the benefit entirely depends on how much you actually use the car. If you use it every day, maybe the economics work out. If you use it twice during a week-long stay, you’ve just paid €175 (€25 × 7 days) for two rides that would have cost €140 in taxis.

This is the trap that destroys so much personal finance logic around car ownership. People calculate the per-mile cost of owning a car versus taking Ubers, but they base it on theoretical usage, not actual usage. They assume they’ll drive X miles per year, but they never track whether they actually do.

If you design your life so you don’t need a car, or need it only rarely, you don’t have to pay the fixed costs. But once you have it, you end up using it simply because you have it.

The Absurdity Peak

The moment that crystallized all of this happened during a shopping trip. A group wanted to go to a market, but (and this is beautiful) none of them wanted to drive. So my brother-in-law drove them to the shopping area, then left because he didn’t want to wait three hours in the sun doing nothing.

The plan? He’d drive back (another hour round trip) to pick them up.

I told my wife this was insane. They should just take a taxi, pay for it, and call it a day. Her response was perfect in its illogic: “That doesn’t make sense. We rented the car exactly for this.”

Sunk cost fallacy in its purest form. We’d already paid for the car, so using it had to be “free,” even when using it was more expensive and less convenient than the alternative, especially if you would give any value to my brother-in-law’s time.

I didn’t even bring up the concept of sunk costs with her because we’ve had this conversation before. She knows the theory (she loves reminding me that she knows it!) but somehow it evaporates when applied to real life.

The Ownership Trap

This car rental story is actually a microcosm of a much bigger problem with how we think about ownership. Having your own car gives you freedom. But sometimes that “freedom” becomes something that owns you instead.

Consider the classic example: once you own a car, you start doing school runs with it, even though you used to walk perfectly fine. Now each trip takes longer because of traffic and parking. It’s more expensive when you factor in gas, maintenance, and the risk of accidents or scratches. But you don’t see these costs because there’s no meter ticking in front of you.

The psychological shift is subtle but profound. Before you owned a car, walking to school was normal. After you own a car, walking to school feels like “not using” something you paid for. You’ve turned a perfectly good solution into a “waste.”

It’s like the old joke about boat ownership: there are only two happy days in a boat owner’s life, the day they buy it and the day they sell it. But somehow we keep buying boats (and cars, and vacation homes, and gym memberships we never use…at least the latter is very useful to the gym goers because it lowers their costs 🙂 ).

The Vacation Home Version

Some people take this logic to its natural conclusion and buy vacation homes. The math can look compelling: if you vacation in the same place every year and spend €3,000 on hotels, maybe a €150,000 vacation home starts to make sense after, say, 15 years.

But this calculation assumes you’ll want to go to exactly the same place every year for the next 15 years. It assumes you’ll use it the same amount each year. It assumes maintenance costs won’t spiral. It assumes you won’t get bored.

Most importantly, it assumes that tying up €150,000 in a vacation home is better than investing that money and continuing to rent. That’s a big assumption, especially when you factor in the opportunity cost and the loss of flexibility.

The initial excitement and dreams might fade, but the mortgage payments don’t.

The New Options Economy

Here’s what makes these decisions even more complex: we live in a world with way more options than our parents had. Traditional ownership models are competing with sharing economy alternatives that didn’t exist 20 years ago.

I have a friend in London who travels constantly. While he’s away, he sublets his apartment on Airbnb. To me, this sounds like a nightmare: packing your stuff, preparing your home for strangers, dealing with the logistics. But he makes so much money from it that each trip costs him half what it would otherwise.

Pros and cons. It works for him, but it wouldn’t work for me. The point isn’t that one approach is universally better, it’s that we now have more options and navigating them is not easy or intuitive.

The Internet’s Terrible Advice Problem

The internet is full of absolute takes on this stuff, and it’s maddening. You’ll find people who insist that anyone who owns a car is financially illiterate, and other people who insist that anyone who doesn’t own a car is wasting money on ride-shares.

Both groups are wrong because they’re trying to apply universal rules to highly personal situations. The “right” financial decision depends entirely on your specific life, your specific needs, and your specific values.

What matters isn’t following someone else’s formula. What matters is understanding the real cost of each of YOUR choices and making sure your stuff doesn’t end up owning you. For example, flexibility (or opnionality if we want to stay in finance lingo) has value and therefore a cost; if you look only at the cost side, it might look like a bad decision. But that’s not the reality.

My Swiss Compromise

I live in Switzerland and don’t own a car. This choice has costs. If I want to bring my daughter skiing, I have to figure out trains or car rentals. She started surfing before skiing, which is…unusual?…for a Swiss kid. Some of this is me being lazy about the logistics of train travel with ski equipment. Some of it is not being organized enough to rent cars for day trips. My choice not to own a car has real costs.

But I think these costs are less than having a car sitting unused five days out of seven (and I’m not even sure I’d use it every weekend if I had one). Less than the hassle of finding parking every time I move it. Less than the insurance, maintenance, and depreciation.

Moving to suburban life would probably make car ownership essential, but it would make everything else worse. My commute would be longer and less pleasant. My wife’s too. Our kids would probably end up in a less international school environment. All so I could conveniently park a car in front of my door? Probably not worth it.

But this is my calculation based on my specific situation. Someone else might reasonably reach the opposite conclusion.

The Real Lesson

The Marrakesh car rental taught me something important: sometimes the decisions that feel most obviously correct are often the ones worth questioning most carefully.

When the math looks simple, it probably isn’t simple. When everyone agrees something is obviously the right choice, it’s probably more complicated than it appears. When you find yourself saying “we paid for it, so we have to use it,” you’re probably about to make a bad decision.

The goal isn’t to optimize every choice to perfection. It’s to be honest about the real costs: financial, psychological, and practical. It’s to recognize when you’re rationalizing rather than reasoning. It’s to make sure you own your stuff, rather than letting your stuff own you.

Sometimes that means taking the taxi even when you’ve already paid for the car. Sometimes it means renting instead of buying. Sometimes it means buying instead of renting.

But it always means being honest about what the choice really costs and what it really gets you.

The Bigger Picture

This story isn’t really about cars or vacations. It’s about how we make financial decisions in a world full of hidden costs, psychological traps, and social pressure to do what “makes sense.”

We tell ourselves we’re being rational when we’re often being anything but. We optimize for the wrong variables. We ignore costs that don’t show up on receipts. We make choices based on how they make us feel rather than how they actually affect our lives.

The rental car in Marrakesh cost us €XXX and saved us maybe €YY compared to taxis. But the real cost was the stress, the arguments about who would drive, the (additional) time spent in traffic, and the mental energy devoted to justifying decisions we were not all comfortable with.

Was the “savings” worth it? Maybe. But sometimes, admitting we’d made a mistake feels worse than continuing to make it.

And that, more than any spreadsheet or calculation, is why so many people struggle with money. We’re not fighting the numbers. We’re fighting ourselves.

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