Knowing you had a 50 percent chance of winning and would be paid 10 times the amount of your bet if you won, what fraction of what you now own would you be willing to wager?
Hmmm….I guess I should start by figuring out how much I actually own. Granted it’s not much. There’s the retirement, or what’s left of it. It’s definitely not where it should be at. My car would bump the number up a bit, even with all the scratches and dents on it. My book collection could be worth something, if I could find someone interested in my Forgotten Realms and Dragonlance collections. There’s my computer, I could part some of it out, like the SSD and the video card maybe. Processor is too old I think to get any money out of it. Maybe the bed; is there a used market for Sleep Number beds? I think that’s really it. In the grand scheme of things, I own a lot and very little. I’m going to say….actually I’m not going to say. You can figure it out on your own and I think I’m slightly embarrass of my material worth. But that topic can wait for another time.
So now that I’ve roughly figured out how much I’m worth, how much of that would I wager on a 50/50 bet. 50% of it maybe? I mean I’m not worth that much in the first place, what do I have to lose, right? And in a way, it’s better than how I’m handling my finances right now. At least this way, I have a chance to make back all of my losses for the last few years. And I’m actually doing this right now with my retirement, pretty much betting that if I leave it at a higher risk pool, I’ll eventually make up for my losses instead of playing it a little safer at this point in my life. Really, this question is just about our retirement system and what category are our investments are in (if we have a retirement plan).
And 50% is at the bottom of the curve for me. I don’t think that I would go lower than 50%, but I could see myself going higher if my income was lower. I mean, what would I have to lose by not going higher. Does that make me not as desperate as I think I am? Is that the way of the world? The poorer you are, the more risk you take? I mean if I had a million dollars (which really isn’t much as it used to be), would I bet 50% of it to make 5 million more or to go down to $500,000. I mean in the Bay Area, would that really make a difference? I guess it would mean the difference between living in SF/Oakland or living in Vacaville/Brentwood. Either way, I would still be dealing with traffic.