Being 19, $100k is over 10 times the amount of money I have ever owned in my life, and I'm pretty damn tight with my money for my age. That $100k would change my life. I can take a chance afterwards by investing a portion of that $100k into something.
>>1063050 Yep pretty much. Same goes here. I you could repeat the "coin toss" of 1 mil or nothing, the more the toss was repeated, the closest you would get to an average of 500 million.
But here, I'm assuming you only get to take the chance once (otherwise you might as well keep repeating the choice and pick $100,000 until you have enough.) So you go once, and whatever result you get excludes the possibity of the other. You can't win after losing or vice versa. So you have to events, both with a 50% probability which can be, but here isn't, the same as a 100% probability of a "convergent" event (both events at once, here win 1mil and win O simultaneously.)
It depends on the setting. If a man in a suit with three briefcases shows up, Ill take 10% of million than a 50% chance to not have any windfall anyday. Now the question for me is do I have to claim this money on my taxes or is it under the table cash?
So this is the true nature of /biz/. I am so disappointed. I thought for sure everyone would go for the shot at the million. It's just basic logic to go with the expected value of $500k and /biz/ness men need to be risk takers. Honestly baka.
>>1063259 But honestly how would 100k be life changing? You ended up making it without a windfall. I mean 100k isn't the difference between life and death for almost anyone. No one *needs* an extra 100k.
>>1063272 Getting from 0 to 100K takes much more time than getting the next 100k, and the next, etc.. For people starting from scratch, getting a 100K out of the blue could save a good 30 years of their life, so pretty life changing if you ask me
Everyone in this thread saying they could easily turn 100k into 1 million in a few years, how the fuck would you do that? if you could turn money over by 50% a year yearly you'd give warren buffet a run for his money and would have people investing tens of millions in your fund. Please educate me as to how you'd be doing that.
>>1065100 I made a model in matlab to test this and it is always beneficial to switch doors. I was pissed at first but it made sense after closer study and now I have a slightly better understanding of statistics.
>>1065139 I made a model to test the possibilities of any number of doors goats or cars so I could better understand the statistics behind switching or not while practicing scripting.
You're right about the statistics but the standard way of thinking leaves people thinking it makes no difference to switch. It's usually used to showcase that people in general have a complete shit intuitive understanding of statistics.
When I saw the problem, I thought oh, this is ego masturbation- everyone will know to switch, and then think they are so smart for knowing to switch- not knowing that 99% of people also knew to switch.
I guess I had too much faith in the intellect of my fellow man.
I like to think that other people have brains and use them
>>1062814 >Expected return is 100k with the 100k choice, and 500k with the mil choice. >Anyone with some background in math would choose the 1 mil easily. HOLY SHIT YOU CAN'T MAKE THIS STUFF UP only on /biz/ and /sci/ too probably
This is way too much of a simplification. There are many more factors to consider. Take the following example:
You can either have $1 million or a 1 in 500 shot at $1 billion. According to your theory (and I use that term generously), you would obviously take the second option because its expected return is $2 million.
But probability theory says you're not going to get those $2 million, so really this is the equivalent of paying $1 million for a 1 in 500 chance of getting 1 more million.
In the OP example, you are paying $100k for a 1/2 chance to win $400k, which is actually a solid deal, but not for the highschool tier reasons you named. It's solid because the ratio of bet and winnings is 1/4, which is lower than the win probability of 1/2, thus making your bet a good one.
>If someone comes selling that for $499k, you pay them $499k, and you got a good deal.
No, you don't have a good deal, because you're paying $499k for a 1/2 chance to have a measly $1k more, while risking the $499k. So, half the time, you would win $1k, the other half you would lose $499k. Does that sound like a good deal, champ?
You need to go back to rudimentary math and check yourself before you piss away your inheritance on retarded investments.
There are three doors and only one gets me the car. I have a 1/3 probability of getting the car with every door. I pick a door and one of the fake doors that I did not pick is revealed to me. I still don't know what's behind these two doors. Essentially the door that was revealed to me is removed from the problem and now it's 50/50 that I pick the right door. Switching makes no difference.
>>1064973 >It's way easier to make money if you're already have the money. This this this this this so much fucking this
People don't appreciate how much easier making money becomes when you already have money. Source: starting a company now. If I had about $15-20k right now, I'd be able to develop a better product, find better suppliers, reduce unit cost, and either increase profit margins on unit sales or be able to hit a lower (more accessible) price point.
Ease of doing literally anything vs access to capital is a logarithmic function. When you're at the low end of capital, everything orders of magnitude more difficult.
Strongly disagree. When I started my company I had a thousand bucks, it kept me real humble, taught me to cut costs, skrimp every penny, how to get on the phone and rip people's heads off for a 2% discount.
If I started my company with a million dollars I won in the lottery it wouldn't be the company it is today, right now.
>>1066369 I agree with that thinking, for the vast majority of people. Most people have absolutely no sense of money, how to manage expenses, how to save, nothing. For me though, I have a strong disconnect with money. Whether I'm playing with $100 or $12,000, my wants and needs don't change, I still manage it the same. Similarly with the company, whether we're making $600 a month or $20,000 a month, I'll still be treating it the same; keep costs low. Use the minimum reasonable number of employees and equipment. You don't need an office in the middle of downtown because that's fucking retarded why would you need that.
But believe me, what you said applies to 99.99% of people. Generally speaking, you're right.
>>1065197 Most people don't switch because they think the host is trying to trick them into switching. People don't even believe you when you try to explain that switching is not 50/50. It's painful. How old are you? Haven't you realised you are smarter/more logical than most people yet?
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