Expected value and how to calculate it.

[Radar]

I want to begin this by stating that I don't have an issue with the formula, however, I have just finished the part of the book(Unscripted ) that spoke about expected value and using the percentages of probability. I don't know where to find the probabilities for each industry. Is it based on personal experience and you'd just give it a ball-park number? Is it a quick google search and then hope that the number they give you is correct?

If there is a post already on this, I'm sorry, I was unable to find it.

Thank you in advance

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MJ DeMarco]

It's just an estimate. The probability of success is less important than is the potential reward.

The point: Large expected rewards skew expected value greatly even at 1 or .5% success probability.

 

[Radar]

It's just an estimate. The probability of success is less important than is the potential reward.

The point: Large expected rewards skew expected value greatly even at 1 or .5% success probability.

Alright, so just to clarify, we are looking at the expected outcomes and despite the probability, we would like to focus on that which has the higher potential outcome? I apologise if this is not quite what you meant

 

[MJ DeMarco]

we would like to focus on that which has the higher potential outcome?

Yes.

Business is hard and many entrepreneurs will vouch that starting a small cafe (with low reward) is just as hard as starting something else with higher reward.

This might be relevant.

GOLD! - NEWSLETTER - STOP Cheating Yourself and Earn What You're Worth!

How to Stop Cheating Yourself, And Earn What You Deserve. Question: Is the effort you're expending worth the reward? New from the Fastlane newsletter (click link to subscribe, registered forum users can OPT-IN via their account details in control panel.) ---- Two hikers, both smitten by the...

www.thefastlaneforum.com

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Radar]

Yes.

Business is hard and many entrepreneurs will vouch that starting a small cafe (with low reward) is just as hard as starting something else with higher reward.

This might be relevant.

GOLD! - NEWSLETTER - STOP Cheating Yourself and Earn What You're Worth!

How to Stop Cheating Yourself, And Earn What You Deserve. Question: Is the effort you're expending worth the reward? New from the Fastlane newsletter (click link to subscribe, registered forum users can OPT-IN via their account details in control panel.) ---- Two hikers, both smitten by the...

www.thefastlaneforum.com

Thank you very much, I will have a look at that