Skip to content
GetProfitable
Search
Dictionary

Planning fallacy

Systematically underestimating how long things take and how much they cost - including how long it takes to become consistently profitable.

Asked for a timeline, people describe the version where nothing goes wrong. Actual outcomes include the things that go wrong, and they usually do.

In trading the fallacy sets up the classic failure path: quitting a job on a six-month runway, expecting to replace an income from a small account, or planning to pass a prop evaluation on the first attempt with the fee money as the only buffer. The underestimate is not of skill, but of variance and of time.

Use outside data. Look at how long it took people you actually know, add a wide margin, and fund the runway for the slow case. Anything faster is a bonus rather than the plan.

Related: optimism-bias, evaluation, risk-of-ruin

Educational only, not advice. Spotted an error? Post in Site Feedback.