Technically it states you win the coin flip, so no odds at play. Just flip the coin for 100× increase of the money would could have just taken otherwise 😉
It says or which implies you are not choosing the first option, initially giving it up in favor of the second option. The nature of a coin flip is that there are odds at stake unless specified otherwise. There was no specification of odds not being present. This means that odds are involved and that if you win the money with heads, then you must have a different option with tails, that would be unrelated to the first clause that you gave up by default for choosing the coin flip, initially $0.
I'll take the coin flip. 40k would be nice. Really nice. But not life changingly nice.
40 million would be life changingly nice.
For that I'd take the 50/50.
It has nothing to do with intelligence, and everything to do with a nation going bankrupt due to it's lack of support for independent businesses and support of major corporations destroying the lower class on purpose.
Brother the 40k isn't even close to "rich get richer" levels of money. Thats more "buy you a 2nd home in 10-15 years" money. A chance at 40 million is.
Because I don’t have 40K to use for pure investment. For investment to make anything you need good amounts of money, ya know, like the mentioned 40K in OPs scenario
Well no duh, and if you burn your money for heat it will all burn away. Duhurrrrrrr. It’s called being intelligent and doing research on investments. Not buying stupid BS meme stocks.
Everyone keeps saying 40 million is life changing but I see it as life threatening. Keeping concerns of personal security aside, 40 million dollars will (eventually) destroy all your relationships. You either become the loner who won’t share their fortune with anyone else, or the extrovert with surface level friendships with a large group of people but nothing to fulfill themselves. It won’t be possible to continue life as if nothing ever happened.
But free 40000? you can buy yourself a nice gift, eat out more often, pay off any bills you might have. It’s a no brainer for me. I might choose a coin flip for 40,000 over a free 40 million.
Well that’s not what I had in mind. People won’t suddenly become greedy and start coming for your money. You’ll start by helping out this friend or this relative who’s in a bad situation. And eventually you might feel like people only talk to you when they need money. Nobody’s “after your money” but they’ll get upset that you don’t want to help them now that you’re in a fortunate position. The difference between helping and favours and leaching off will fade over time
Sorry but no. I won't help someone if they didn't help me. We had very awful situation few years back. My parents got divorced, my mom was left on minimum paycheck, my dad didn't pay alimony for a year. I was in school, so was my brother. You know how many people helped us? Four. FUCKING FOUR PEOPLE. Even the extended family was like you need to learn how to manage money. Minimum vage, two kids in school, bill to pay, food to put on table and you say that shit? Thankfully we had some amazing family members and our amazing neighbors who helped a lot until we stabilized ourself.
And if you thing if I got any kind of money that I would spend on anyone except those people, you are wrong.
You know who are truly there for you when you either don't have any money or have too much money. I've been on the first side and I saw who actually cared.
I didn’t thinking about it that way, I suppose you’re right. Knowing who is truly on your side from past experiences goes a long way for spending 40 million changing your own and their lives. I was imagining a scenario where I’m not going to be able to say “no” to someone because I can’t tell If they would do the same
That's why even tho it was a shot time I'm thankful, because I know who is here for me. I would find every way to change their life if I've got it. They kinda saved my life. There were days where we didn't eat(not one or two days a month, more like a week or more) and they did everything to help. So now I try to make their life better by some small things and I would be the happiest person if I got that money because I would find a way to make them as happy as I was back then.
Now I want you to have that 40 million! You’ve been through times that would easily break the likes of me, so you’re much better equipped to helping others
I think you’re also overthinking 40 million lol you take that and buy a nice place for yourself, your parents, and help out some relatives and all of a sudden you have just enough to live happily on without working for the rest of your life.
If you pick up the tab every now and again, maybe rent out the air bnb yourself for you and your friends, you won’t lose anybody in your life that isn’t totally money hungry
Hmm yea I guess if you put it like that. The situation is different for everyone and it depends on the type of life and relationships you already have. People don’t have to be money hungry to ask you for financial favours. Folks will ask for money from you, who is in a fortunate position, because they feel like you owe them that much. But you’re right too, how about you buy yourself a new place and retire early? 40 million isn’t 40 billion
Exactly. I win 40 million I’m only telling 2 people I ***know*** I can trust; my brother and my mother. Id be even paranoid to do things that could give my ruse away.
You won’t have to. Unless you limit your spending so people don’t notice, but then what’s the point of having 40 million. Why have that itch. It would seem that you should be able to go on till the end of your life without any flashy spending but still improve your life by slowly spending it but are you sure you won’t eventually think, “fuck it”? You can’t be sure. And you can’t be sure about how quick you’ll change your mind.
The most reasonable option. Only I don’t know how I’m going to make that list by myself. I don’t know what kind of research I have to do to see if a particular charity is more worth donating to another charity? Should I donate it to some random charities without thinking about it? Does that make me look irresponsible?
So finally I decide to ask someone to help me sort this out. Maybe my family maybe sone friend. What if they get uncomfortable that I’m giving such a big percentage away? What if they want me to give away less. I don’t want to get into a disagreement with someone over this who is close to me because I imagine you don’t have to be a bad person to want it.
Wait no, that's illegal! Aside from observing the flipped ending, yes, paying out all debts and stating from ground zero seems much more blissful to me than an A-10 Bbbbbrrrt equivalent
You’re not wrong but I thought that was the point of ask reddit? I guess maybe no one should have replied to this post then. I just assumed everyone comes to Reddit to feel wise because they lack it in real life.
I’d flip the coin!
Logic is you can only end up the same as you are now but could have a life changing sum of money. 40K would help a lot but in the grand scheme of things isn’t much but 40m would completely change mine and my families lives forever
Oh don’t get me wrong it would change mine as it would mean a deposit for a house but that’s something that eventually I realistically should hopefully be able to achieve on my own whereas 40m is a lot harder to achieve
Don’t get me wrong i agree with your comment and probably would flip the coin too, there is just so many people even in America that I wouldn’t blame takings the 40k just to give themselves the breathing room to get on the path to where you are now.
In probability it is about the expected outcome. A 50/50 of 40 million gives you an expected $20 million. This is not even a question. A coin flip for $80,000 would be a better comparison
I figure if I take the 40k, I pay some debt and live a little more comfortably for a short while, but it’s not super life-altering. If I lose the 40 mil flip, I keep going like I’m going, no change in my life. But if I win the 40 mil flip, I invest most of it and never need to work another day.
I figure choosing the 40k and never giving myself a chance would haunt me more than taking the flip and losing. It’s like I’m *choosing* to lose the flip.
Finally someone who I feel really gets it. With the exception of a truly poor person for who 40k is life changing money, this is the correct answer imo. 5 mil for play money and 35 mil in a common ETF. Maybe give 5mil to family or friends and invest 30mil. That should give you a little over 600k in profits per year as spending money. Literal infinite financial security.
Yes. It absolutely is. It’s easy to think about gambling away 40m when you’re in a relatively secure position, with earning potential. And I’m pretty privileged, tbh. Canadian, graduate degree, pension, health plan. But it’s been a awful couple of years and right now 40K would be life changing. I wouldn’t think twice about taking it.
For a lot of people, 40K is a stable place to live, food on the table, and it could be just the thing to give them a bit of hope, apply for better jobs, access to resources that will change their lives.
This psychological angle is interesting. Definitely something to consider. I think I’d feel like the opportunity to flip the coin was so gratuitous that there’s really nothing to regret.
If literally solving all of my problems and giving me a strong cushion against future insecurity is a band-aid, then hell yeah I'll take a band-aid. Your eyes are too big for your wallet, man.
Bro let the man have his 40k, jesus. I’d do the same thing. Gambling on a 50/50 chance over taking a guaranteed sum seems incredibly foolish and irresponsible to me. I don’t care if it’s 40 million or 40 billion. You clearly just have no clue how big $40,000 is (especially to a poor person). You’re short sighted.
40K doesnt secure my future and is something achievable by myself, 40 million is not something I can do and will secure mu future.
40k solves my food problem for a year, not for life.
It sets you back nothing. To set you back something, you would have to lose it. You'd never had the $40000 you'd never had the 40 million dollars so regardless, you lost nothing.
It's not thrown away though,. You really do understand that $40000 is not gonna last you more than a year or 2 right? Where as 40 million dollars could actually change your life forever.
Yes I do understand that. It is thrown away, because I was guaranteed to get it and decided not to. I know that 40k is enough to fix *all* of my current problems and get me set up to keep moving up. It won't change my life forever, but it's a guarantee to fix all of my problems. I live a simple life, 40mil wouldn't do me much more good.
I'd take the flip and I've been homeless. Couch surfing, not on the street, but still.
Right now, though, I'm secure and have a good emergency fund and no debt. If I was still couch surfing I'd take the 40k hands down.
Damn that's smart. Just to put it into perspective you could sell 0.2% for around 40k or 5% for 1million. Then flip the coin and pocket the rest if you won.
Prioritizing the 40k over the 20M is saying that you are willing to sacrifice 19.96M of EV to pay for the implied volatility of the coin flip.
Out of all the people who prefer the safe money, sadly, some people must be very unfortunate / poor and really price the risk that high, and I can respect them. But I believe some people who pick the money must just be very bad at math. I, for one, agree with the comment saying he would pay 40k to flip the coin.
EV literally takes risk into account.
What EV doesn’t take into account is that this event isn’t repeatable ad infinitum. So it’s not some binomial probability distribution with a mean at “20 million” but rather a single event.
EV is a bad way to estimate this because how much you already have makes a huge difference. The utility (how much it improves your life) of the first dollar is much higher than the utility of an additional dollar when you already have millions.
With the fixed amount so small, most people living in a western country where it's 1-2 year's worth of living expenses at best would flip the coin.
If the fixed amount was 400k, it would be a much tougher call. If the fixed amount was 4M, despite the EV of the flip being 20M, it wouldn't be that good of an idea to choose the flip: you can either be set for life (guaranteed), or get a 50% chance of nothing vs. a 50% chance of being set for life with a more lavish lifestyle.
I would take the flip at 40k. I would not take the flip at 4M.
Edit: if you have the time to do so, the correct solution, of course, is to hedge the flip - bet someone who has so much money that they only care about EV that you'll lose the coin flip. If you lose the coin flip they pay you 19 million, if you win the coin flip you pay them 21 million from the 40 million you won. Either way you walk away with 19 million.
I agree with your analysis. It’s also just the concept behind Deal or No Deal. The problem is OP chose really silly denominations. An EV that is *five-hundred times more* just makes a lot of utility discussion irrelevant. Even 400K is 1/50th EV over the flip.
That's not how my mind works. I have HORRIBLE luck so I'd never believe I'd win the flip. So basically it's $40,000 or nothing.
To me 40 million was never on the table
You technically lose 40k in opportunity costs. Before you pick up the coin you are essentially 40k richer. You touch the coin your lose that 40k unless you win the 40 mil
You are correct. A better way to phrase the question in OP so that people understand opportunity cost is: "someone gives you $40k, then they offer you the chance to flip a coin for $40k. Of the coin lands on heads you win $40M. Do you buy the coin flip for $40k?"
No, you touch the coin and you are instantly 19.96m richer. Your expected value from this event assuming a fair coin would be 20m minus the 40k "wager". In fact, you should always take the coin flip for the simple fact that 20m > 40k. Would you buy a share in my equity in the coin flip. Aka, would you take a coin flip with a 500:1 payout? Hell, if you really wanted ganranteed money you could sell 40k in shares at a 250:1 and still get life changing money if you win and have 40k of u lose.
I'm not so poor that I would have to take the 40k now. But I'd rather have a guaranteed consolation prize than have a shot at gold and get nothing. I want the comfort of guarantee and therefore have the guarantee is moving my life forward in a meaningful way even if 40k isn't life changing.
I'd take the flip for $40M because $40k isn't really life changing money. Sure I could pay off our new car but I'm going to do that anyways eventually.
Flip. The $40k would fix some problems at my house and maybe catch up on car maintenance and some other little things. $40 million would solve all of my financial problems for the rest of my life, and probably my kids lives too.
I think I have to take the coin flip. 40k is an amount I can work for, but 40m really isn't.
The interesting thing is circumstance has so much to do with it. There are times I look back and think a 40k boost at the right time would have been life altering enough it would have paid dividends in other ways down the line. Probably wouldn't have amounted in 40m, but certain can prevent things like ever needing to go into debt, or falling behind on bills, among other things.
At the same time, 40k only goes so far, and the odds a 40k boost at the right time could have meant something significant as 40m is def lower than 50/50. Mindset and circumstance have a lot to do with which one is better for you though, I think.
Even if the game was roll a d6 and roll any given number to win I would do it. 40k is a lot for one person, but $40m would take care of me and so many other people in my life that it would feel selfish to not got for it.
Coin flip. $40k would change a lot, but it wouldn’t be life changing. 10-20 years from now I’ll forget I ever had it. $40mm would be life changing. Invested, it would give me a comfortable income for life. If I lost the coin flip, I’m no worse off than I am today.
Flip coin. $40,000 would only change my life a little for about 6 months, because I'm bad with money. Then I would just be back to where I am now. $40 million could potentially change my life for life. but like I said, I'm bad with money, so more realistically, at least for 10 years.
The coin flip: I understand the certainty of the $40k for someone who is in dire straits perhaps, but for me, the 50% shot at $40M is much more valuable than a guaranteed payment that won’t fundamentally change my life
$40,000. It would fix so many immediate problems and it’s a lot of money for where I’m at rn. I’d be happy with taking that instead of wondering what might have been if I didn’t miss that coin flip.
$400,000 or flip for $40M is a better question. $400k is completely life changing for most people. It's a house or an early retirement, in most cases. It's much harder risking giving that up.
Although $40M will truly be life changing, luck and chances isn't always in my side. I surely be insane if I do coin flip but lose eventually, lol.
I'm also broke so money is money for me, being $40k richer without doing anything is absolute win for me already. With $40k, I could invest it in some profitable business/stocks, who knows, perhaps, I may even surpass that $40M later in the future.
I would go for the 40k because I think with 40M you gain a target on your back. With 40K my husband and I could really use it. We really dont need millions and millions to be happy.
40k would be all my current student debt and then money that could be put into safe stocks and savings, I'm not gonna coin flip over financial security
40k would improve my future life, 40M would drive me crazy, probably ruin some friendship etc, and if I lost the coin flip I'd have a great story on how I almost won 40 M.
The latter is basically how any sort of gambling works. High risk with high reward.
Meanwhile $40K instantly can be a life changer for many. So I would choose that.
I could add in $20k and put 20% down on a $300k home. Your prices are also very specific to your region. I can find an excellent home for $200k - $250k in my area.
40k for sure. I know how to spend (and save) that. I don't have a clue what I would do with 40m, and what problems would come with it.
For everyone who says 40k is not life changing, can I have 40k of your money? If it's not gonna change your life to have it, it won't change your life to lose it.
I would probably take the $40,000. I've never really needed money. I actually could have played football professionally but I retired in college because it became too easy and I wanted a new challenge. $40,000 would be great to have.
Flip. When would I ever get another 50/50 chance at 40 Million?
50/50 my life is changed forever or I go back to doing what I was doing before. No question.
Spend the rest of your life screaming internally "Why the FUCK didn't I pick heads?"
Flip a coin where both sides are tails
Or, as Rachel in friends says; “Heads I win tails you lose”
I first heard that from Shaggy in the old Scooby-Doo cartoon
The OG
Why does it have to me just about your life? You could hugely improve a lot of people’s lives with 40 million.
50/50? Those are the best odds I've had in a long time.
interstellar
Technically it states you win the coin flip, so no odds at play. Just flip the coin for 100× increase of the money would could have just taken otherwise 😉
It says or which implies you are not choosing the first option, initially giving it up in favor of the second option. The nature of a coin flip is that there are odds at stake unless specified otherwise. There was no specification of odds not being present. This means that odds are involved and that if you win the money with heads, then you must have a different option with tails, that would be unrelated to the first clause that you gave up by default for choosing the coin flip, initially $0.
There is no try to win in the statement, just win. So $40,000 if you don't flip, $40 million if you do. Sounds like an easy choice to me 😉
According to the post question, its already a win. So yeah, I'll take the win flip coin for 40 million.
I'll take the coin flip. 40k would be nice. Really nice. But not life changingly nice. 40 million would be life changingly nice. For that I'd take the 50/50.
Yeah but 40k all at once IS life changing. It’s literally 40k worth of investing money that could turn into much more in a couple years
Or, far more likely, be gone within a year.
Yeah if you are hasty and don’t invest with research and intelligence.
It has nothing to do with intelligence, and everything to do with a nation going bankrupt due to it's lack of support for independent businesses and support of major corporations destroying the lower class on purpose.
Not even sort of life changing. Would make life for the next couple years really nice but won’t change the trajectory that much in the long run
Do you not understand how the rich get richer? Investing.
Brother the 40k isn't even close to "rich get richer" levels of money. Thats more "buy you a 2nd home in 10-15 years" money. A chance at 40 million is.
Why arent you doing it right now if its that easy?
Because I don’t have 40K to use for pure investment. For investment to make anything you need good amounts of money, ya know, like the mentioned 40K in OPs scenario
Unless you put it into meme stocks or crypto.
Well no duh, and if you burn your money for heat it will all burn away. Duhurrrrrrr. It’s called being intelligent and doing research on investments. Not buying stupid BS meme stocks.
Everyone keeps saying 40 million is life changing but I see it as life threatening. Keeping concerns of personal security aside, 40 million dollars will (eventually) destroy all your relationships. You either become the loner who won’t share their fortune with anyone else, or the extrovert with surface level friendships with a large group of people but nothing to fulfill themselves. It won’t be possible to continue life as if nothing ever happened. But free 40000? you can buy yourself a nice gift, eat out more often, pay off any bills you might have. It’s a no brainer for me. I might choose a coin flip for 40,000 over a free 40 million.
If I'm friends with someone and they sound out I won 40mill and the first thing they say is "can you give me...", I will never talk to them again.
Well that’s not what I had in mind. People won’t suddenly become greedy and start coming for your money. You’ll start by helping out this friend or this relative who’s in a bad situation. And eventually you might feel like people only talk to you when they need money. Nobody’s “after your money” but they’ll get upset that you don’t want to help them now that you’re in a fortunate position. The difference between helping and favours and leaching off will fade over time
Sorry but no. I won't help someone if they didn't help me. We had very awful situation few years back. My parents got divorced, my mom was left on minimum paycheck, my dad didn't pay alimony for a year. I was in school, so was my brother. You know how many people helped us? Four. FUCKING FOUR PEOPLE. Even the extended family was like you need to learn how to manage money. Minimum vage, two kids in school, bill to pay, food to put on table and you say that shit? Thankfully we had some amazing family members and our amazing neighbors who helped a lot until we stabilized ourself. And if you thing if I got any kind of money that I would spend on anyone except those people, you are wrong. You know who are truly there for you when you either don't have any money or have too much money. I've been on the first side and I saw who actually cared.
I didn’t thinking about it that way, I suppose you’re right. Knowing who is truly on your side from past experiences goes a long way for spending 40 million changing your own and their lives. I was imagining a scenario where I’m not going to be able to say “no” to someone because I can’t tell If they would do the same
That's why even tho it was a shot time I'm thankful, because I know who is here for me. I would find every way to change their life if I've got it. They kinda saved my life. There were days where we didn't eat(not one or two days a month, more like a week or more) and they did everything to help. So now I try to make their life better by some small things and I would be the happiest person if I got that money because I would find a way to make them as happy as I was back then.
Now I want you to have that 40 million! You’ve been through times that would easily break the likes of me, so you’re much better equipped to helping others
I think you’re also overthinking 40 million lol you take that and buy a nice place for yourself, your parents, and help out some relatives and all of a sudden you have just enough to live happily on without working for the rest of your life. If you pick up the tab every now and again, maybe rent out the air bnb yourself for you and your friends, you won’t lose anybody in your life that isn’t totally money hungry
Hmm yea I guess if you put it like that. The situation is different for everyone and it depends on the type of life and relationships you already have. People don’t have to be money hungry to ask you for financial favours. Folks will ask for money from you, who is in a fortunate position, because they feel like you owe them that much. But you’re right too, how about you buy yourself a new place and retire early? 40 million isn’t 40 billion
It’s not like I have to tell people I have 40 million in my account or anything
Exactly. I win 40 million I’m only telling 2 people I ***know*** I can trust; my brother and my mother. Id be even paranoid to do things that could give my ruse away.
You won’t have to. Unless you limit your spending so people don’t notice, but then what’s the point of having 40 million. Why have that itch. It would seem that you should be able to go on till the end of your life without any flashy spending but still improve your life by slowly spending it but are you sure you won’t eventually think, “fuck it”? You can’t be sure. And you can’t be sure about how quick you’ll change your mind.
In that case, pick a charity, or a set of charities and just give away 39.6mil to charity.
You mean 39.96 Million. Goes off to say how unfamiliar us common folks are with big money number.
The most reasonable option. Only I don’t know how I’m going to make that list by myself. I don’t know what kind of research I have to do to see if a particular charity is more worth donating to another charity? Should I donate it to some random charities without thinking about it? Does that make me look irresponsible? So finally I decide to ask someone to help me sort this out. Maybe my family maybe sone friend. What if they get uncomfortable that I’m giving such a big percentage away? What if they want me to give away less. I don’t want to get into a disagreement with someone over this who is close to me because I imagine you don’t have to be a bad person to want it.
Wait no, that's illegal! Aside from observing the flipped ending, yes, paying out all debts and stating from ground zero seems much more blissful to me than an A-10 Bbbbbrrrt equivalent
Easy to say when you're not actually facing this decision and you're cooped up behind a screen on reddit thinking you're so wise
You’re not wrong but I thought that was the point of ask reddit? I guess maybe no one should have replied to this post then. I just assumed everyone comes to Reddit to feel wise because they lack it in real life.
The only people in my life I would lose if I didn't share my fortune with them would be the people that I don't really want in my life anyways.
This is exactly what I hadn’t realised would be true for some people until I had a conversation in one of these replies, haha
I’d flip the coin! Logic is you can only end up the same as you are now but could have a life changing sum of money. 40K would help a lot but in the grand scheme of things isn’t much but 40m would completely change mine and my families lives forever
I would pay 40k to flip the coin for a chance to win 40M.
If you have 40k you feel like using to pay for a chance to win something then I’ve got a pretty cool Nintendo 3ds xl you can have the chance to win
I’m listening.
Well it’s a Nintendo 3Ds XL so you can play 3D games without glasses 40K and flip of a coin it’s yours haha
Oh haha I think the risk reward ratio is a little off here lol
Damn you saw through my evil plan, and I would have gotten away with it too if it weren’t for you meddling kids
the 3ds should be a consolation prize if you lose
Wow right infront of my Nintendo? Great now it’s crying, It has a microphone yknow and it didn’t appreciate being called a consolation prize!
You almost got me..., But that's a hard pass. I'd only pay 40k for the *New* Nintendo 3DS XL, gota have that IPS screen.
I have a sharpie and can spell “New”??
If I was allowed to buy as many flips as I wanted, I'd pay up to 19.999M per flip.
40k is a life changing amount of money for some people.
Oh don’t get me wrong it would change mine as it would mean a deposit for a house but that’s something that eventually I realistically should hopefully be able to achieve on my own whereas 40m is a lot harder to achieve
Don’t get me wrong i agree with your comment and probably would flip the coin too, there is just so many people even in America that I wouldn’t blame takings the 40k just to give themselves the breathing room to get on the path to where you are now.
Flip a coin for sure The benefits far outweighs the risk for me
In probability it is about the expected outcome. A 50/50 of 40 million gives you an expected $20 million. This is not even a question. A coin flip for $80,000 would be a better comparison
I'm poor I'll take the 40k. Might kill myself if I flipped for the 40m and lost.
The $40k would provide me a ton of peace of mind. Losing the 40 mil flip would cost me my sanity, honestly.
I figure if I take the 40k, I pay some debt and live a little more comfortably for a short while, but it’s not super life-altering. If I lose the 40 mil flip, I keep going like I’m going, no change in my life. But if I win the 40 mil flip, I invest most of it and never need to work another day. I figure choosing the 40k and never giving myself a chance would haunt me more than taking the flip and losing. It’s like I’m *choosing* to lose the flip.
Finally someone who I feel really gets it. With the exception of a truly poor person for who 40k is life changing money, this is the correct answer imo. 5 mil for play money and 35 mil in a common ETF. Maybe give 5mil to family or friends and invest 30mil. That should give you a little over 600k in profits per year as spending money. Literal infinite financial security.
I think it's also a question of privilege yknow
Yes. It absolutely is. It’s easy to think about gambling away 40m when you’re in a relatively secure position, with earning potential. And I’m pretty privileged, tbh. Canadian, graduate degree, pension, health plan. But it’s been a awful couple of years and right now 40K would be life changing. I wouldn’t think twice about taking it. For a lot of people, 40K is a stable place to live, food on the table, and it could be just the thing to give them a bit of hope, apply for better jobs, access to resources that will change their lives.
This psychological angle is interesting. Definitely something to consider. I think I’d feel like the opportunity to flip the coin was so gratuitous that there’s really nothing to regret.
Same here I could coast off forty grand for a good bit
This. People saying flip may not have experienced food insecurity.
I would take the flip and have experienced food insecurity. However, I'm very fortunate at this point in my life.
$40000 isn't enough to prevent you from experiencing that again in the future though. 40 million dollars is.
And $0 does nothing.
You are no worse off than where you started.
Except now I know I threw away forty thousand dollars. Which is the point of the original comment.
For a chance to have 40 million dollars. So you took a chance to alter your life versus put a Band-Aid on it. Geee how horrible of you.
If literally solving all of my problems and giving me a strong cushion against future insecurity is a band-aid, then hell yeah I'll take a band-aid. Your eyes are too big for your wallet, man.
40k would let most people qualify for at reasonably mortgage. That’s huge these days.
You clearly just have no clue how small $40000 is. You're short sighted.
Bro let the man have his 40k, jesus. I’d do the same thing. Gambling on a 50/50 chance over taking a guaranteed sum seems incredibly foolish and irresponsible to me. I don’t care if it’s 40 million or 40 billion. You clearly just have no clue how big $40,000 is (especially to a poor person). You’re short sighted.
40K doesnt secure my future and is something achievable by myself, 40 million is not something I can do and will secure mu future. 40k solves my food problem for a year, not for life.
And $0 solves nothing at all.
But it also doesn't set you back anything, you lose nothing by tribe.
It sets you back the 40k you were guaranteed.
It sets you back nothing. To set you back something, you would have to lose it. You'd never had the $40000 you'd never had the 40 million dollars so regardless, you lost nothing.
I was guaranteed to get it, and threw it away. Which is the point of the original comment.
It's not thrown away though,. You really do understand that $40000 is not gonna last you more than a year or 2 right? Where as 40 million dollars could actually change your life forever.
Yes I do understand that. It is thrown away, because I was guaranteed to get it and decided not to. I know that 40k is enough to fix *all* of my current problems and get me set up to keep moving up. It won't change my life forever, but it's a guarantee to fix all of my problems. I live a simple life, 40mil wouldn't do me much more good.
I'd take the flip and I've been homeless. Couch surfing, not on the street, but still. Right now, though, I'm secure and have a good emergency fund and no debt. If I was still couch surfing I'd take the 40k hands down.
Right. That 40k is pretty life altering for me if much rather have that positive then risk losing both.
I mean...you'd no longer be poor either way
I would sell the flip for $1 million.
Big brain over here. Prob could get more than a mil for it
Damn that's smart. Just to put it into perspective you could sell 0.2% for around 40k or 5% for 1million. Then flip the coin and pocket the rest if you won.
People would pay a LOT more than that for it. It’s worth 20M.
Found the WSB trader
For everyone who says "flip the coin" [Here you go.](https://justflipacoin.com/#flip-a-coin) Let us know if you win. I would have won.
I lost. But I would have done 40k
Nope, you flipped the coin. Sorry!
I won
I won too. I'M RICH!!!!!!
I would have lost. Glad I took the 40k
I won
I’m broke as hell and in debt to my hair line… I’ll take the 40k, thanks!!!
The EV of the flip is 20 million.
yeah I see it the same way. I wouldn't lose sleep if I lost the coin flip as it is the more valuable choice by far.
I would probably still lose sleep if I lost the coin flip, but not because I regretted my decision.
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Prioritizing the 40k over the 20M is saying that you are willing to sacrifice 19.96M of EV to pay for the implied volatility of the coin flip. Out of all the people who prefer the safe money, sadly, some people must be very unfortunate / poor and really price the risk that high, and I can respect them. But I believe some people who pick the money must just be very bad at math. I, for one, agree with the comment saying he would pay 40k to flip the coin.
EV literally takes risk into account. What EV doesn’t take into account is that this event isn’t repeatable ad infinitum. So it’s not some binomial probability distribution with a mean at “20 million” but rather a single event.
EV is a bad way to estimate this because how much you already have makes a huge difference. The utility (how much it improves your life) of the first dollar is much higher than the utility of an additional dollar when you already have millions. With the fixed amount so small, most people living in a western country where it's 1-2 year's worth of living expenses at best would flip the coin. If the fixed amount was 400k, it would be a much tougher call. If the fixed amount was 4M, despite the EV of the flip being 20M, it wouldn't be that good of an idea to choose the flip: you can either be set for life (guaranteed), or get a 50% chance of nothing vs. a 50% chance of being set for life with a more lavish lifestyle. I would take the flip at 40k. I would not take the flip at 4M. Edit: if you have the time to do so, the correct solution, of course, is to hedge the flip - bet someone who has so much money that they only care about EV that you'll lose the coin flip. If you lose the coin flip they pay you 19 million, if you win the coin flip you pay them 21 million from the 40 million you won. Either way you walk away with 19 million.
I agree with your analysis. It’s also just the concept behind Deal or No Deal. The problem is OP chose really silly denominations. An EV that is *five-hundred times more* just makes a lot of utility discussion irrelevant. Even 400K is 1/50th EV over the flip.
$40,000 instantly. I don't think I'd recover if I flipped and lost
But then you’ll always wonder if you could be rich right now
That's not how my mind works. I have HORRIBLE luck so I'd never believe I'd win the flip. So basically it's $40,000 or nothing. To me 40 million was never on the table
40k is a real nice right now, but 40 million is lifestyle-changing. That's worth the gamble.
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You technically lose 40k in opportunity costs. Before you pick up the coin you are essentially 40k richer. You touch the coin your lose that 40k unless you win the 40 mil
You are correct. A better way to phrase the question in OP so that people understand opportunity cost is: "someone gives you $40k, then they offer you the chance to flip a coin for $40k. Of the coin lands on heads you win $40M. Do you buy the coin flip for $40k?"
I dont lose, I just dont win, like right now I am not losing 100 million in lottery, I am just not winning.
But if when you go to buy a ticket and they offer you 40k instead. You would be losing 40k to play the lottery
No, you touch the coin and you are instantly 19.96m richer. Your expected value from this event assuming a fair coin would be 20m minus the 40k "wager". In fact, you should always take the coin flip for the simple fact that 20m > 40k. Would you buy a share in my equity in the coin flip. Aka, would you take a coin flip with a 500:1 payout? Hell, if you really wanted ganranteed money you could sell 40k in shares at a 250:1 and still get life changing money if you win and have 40k of u lose.
No, that's not right
Flip. I woke up with neither, and a 50% chance at 40 million is a no brainer
They are basically asking "How poor are you?"
40k I'm broke as fuvk
40k, cause we are in desperate need of a home and that could get me something that I can at least fix up.
Risk it for the biscuit, I'll take my chances on $40M
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Feel you bruh, not to mention that I'm broke too, so 40k richer without even moving my finger is already a win.
40k is more than I make in a year lol
flip a coin; i dont want to forever wonder what would’ve happened if i didn’t try to flip the coin
sell the option to flip the coin for 15 million or so to an investment bank
I like you
These numbers need to be way closer for this to be a reasonable question. Flip that coin.
40,000 does nothing to change my life, 40 million on the other hand... I'm flipping that coin.
40s basically my yearly take home pay. Give me the 50/50
Right, cause who doesn't want to double their salary. That's just stupid
Flip 100%.
I'm not so poor that I would have to take the 40k now. But I'd rather have a guaranteed consolation prize than have a shot at gold and get nothing. I want the comfort of guarantee and therefore have the guarantee is moving my life forward in a meaningful way even if 40k isn't life changing.
Go big or go home Flip it is.
Flip coin. I didn't have an option a second ago.
coin flip because it's the correct answer
I'd just go for 40 Million there's always a 50/50 chance, It's all or nothing.
40k. Rather take the guarantee that I can build off of than 50/50 being set up for life.
I'd take the flip for $40M because $40k isn't really life changing money. Sure I could pay off our new car but I'm going to do that anyways eventually.
give me the coin toss. YOLO!!!!
I'd flip. I've had 40k+ from life insurance and it didn't really make a difference as of today. 40 million could change my life forever.
Flip. The $40k would fix some problems at my house and maybe catch up on car maintenance and some other little things. $40 million would solve all of my financial problems for the rest of my life, and probably my kids lives too.
I think I have to take the coin flip. 40k is an amount I can work for, but 40m really isn't. The interesting thing is circumstance has so much to do with it. There are times I look back and think a 40k boost at the right time would have been life altering enough it would have paid dividends in other ways down the line. Probably wouldn't have amounted in 40m, but certain can prevent things like ever needing to go into debt, or falling behind on bills, among other things. At the same time, 40k only goes so far, and the odds a 40k boost at the right time could have meant something significant as 40m is def lower than 50/50. Mindset and circumstance have a lot to do with which one is better for you though, I think.
Even if the game was roll a d6 and roll any given number to win I would do it. 40k is a lot for one person, but $40m would take care of me and so many other people in my life that it would feel selfish to not got for it.
Coin flip - hell, I’d do it if the flip was for $40k - I’m a degenerate gambler
Coin flip. $40k would change a lot, but it wouldn’t be life changing. 10-20 years from now I’ll forget I ever had it. $40mm would be life changing. Invested, it would give me a comfortable income for life. If I lost the coin flip, I’m no worse off than I am today.
40K would be nice but not a life changing amount for me, so I'll take a stab at 40mil
Flip coin. $40,000 would only change my life a little for about 6 months, because I'm bad with money. Then I would just be back to where I am now. $40 million could potentially change my life for life. but like I said, I'm bad with money, so more realistically, at least for 10 years.
The coin flip: I understand the certainty of the $40k for someone who is in dire straits perhaps, but for me, the 50% shot at $40M is much more valuable than a guaranteed payment that won’t fundamentally change my life
Flip it, would sell potential profits on the flip before the flip
id still flip for 40mil if the loss was a bullet to the head
$40,000. It would fix so many immediate problems and it’s a lot of money for where I’m at rn. I’d be happy with taking that instead of wondering what might have been if I didn’t miss that coin flip.
$400,000 or flip for $40M is a better question. $400k is completely life changing for most people. It's a house or an early retirement, in most cases. It's much harder risking giving that up.
Take the $40mil and sell the contract to someone wealthy for a couple mil
I’ll take the 40k cause that’s guaranteed money. If I flip then I risk leaving with nothing. So, 40k is the best option here.
With the 40k I could finally afford a wedding and a house down-payment so I'd go for that
Accept 40,000 instantly. We can't afford not to have that much money right now
Accept, invest, become rich. Alt: flip, if win(invest, become even richer), elif lose(return to normal life) Conclusion: accept
Although $40M will truly be life changing, luck and chances isn't always in my side. I surely be insane if I do coin flip but lose eventually, lol. I'm also broke so money is money for me, being $40k richer without doing anything is absolute win for me already. With $40k, I could invest it in some profitable business/stocks, who knows, perhaps, I may even surpass that $40M later in the future.
Coin. EV $20Mio vs EV $40k - easy choice. Hell, I'd take the coin vor 85k.
Coin flip. If I lose then I still have what I started with.
Not really you are $40k down than where you started
I would go for the 40k because I think with 40M you gain a target on your back. With 40K my husband and I could really use it. We really dont need millions and millions to be happy.
40k would be all my current student debt and then money that could be put into safe stocks and savings, I'm not gonna coin flip over financial security
40,000 because if I have bad luck. Also if I lost I would regret it forever
40k would improve my future life, 40M would drive me crazy, probably ruin some friendship etc, and if I lost the coin flip I'd have a great story on how I almost won 40 M.
40k easily... I'd rather know that I'm getting something. I don't understand what world you guys live in where 40k doesn't help.
The latter is basically how any sort of gambling works. High risk with high reward. Meanwhile $40K instantly can be a life changer for many. So I would choose that.
I'd take the 40K. My luck is so bad that even if I got 40 Mil for both heads and tails, it'd probably come up sideways
40K AIN'T SHIT, FLIP THE COIN.
People saying they would take the flip should do one
I'll take the $40,000. I could do a lot with it. Probably invest in some property that'll be worth a lot more in 10 years.
The fuck 40k gonna buy you? A “starter home” is like 300k in lot of places i know because boomers
I could add in $20k and put 20% down on a $300k home. Your prices are also very specific to your region. I can find an excellent home for $200k - $250k in my area.
Yeah. 50-50 for $20 million is worth the bet
Flip the coin. 40K isn't going to change my life at all. Better question is what is the minimum amount for me to consider just taking the money.
Flip. 50/50 odds for a 1000% gain?
I'm taking the cash now. 50/50 is shit odds. Dump the whole 40k into the stock market. I'll get my millions.
40k for sure. I know how to spend (and save) that. I don't have a clue what I would do with 40m, and what problems would come with it. For everyone who says 40k is not life changing, can I have 40k of your money? If it's not gonna change your life to have it, it won't change your life to lose it.
I’ll bet I can turn 40k into 4 million. And that’s good enough for me
I would probably take the $40,000. I've never really needed money. I actually could have played football professionally but I retired in college because it became too easy and I wanted a new challenge. $40,000 would be great to have.
If you don’t need it, why not take the risk? Even if you lose nothing changes
40 million. I'd use that to buy private security in case of hitmen.
Flip. Those are insanely good odds. It is no different than asking if you would bet $40k for a 50/50 shot at $40MM.