MAXIMIZING THE "EXPECTED VALUE" OF WHAT YOU DO IN LIFE
SOME COSTS, YES, BUT ALOT MORE VALUE!
Please don't jump to the conclusion that this is complicated because it has some numbers in it. It is actually hugely simple. And it can payoff quite well if you make sensible decisions even in certains where there is uncertainty.
Although this could be done in dollar terms in investing or in business, what is relevant here is investing in our lives to get the maximum return overall in terms of happiness.
Assume we would not do something that is ruinous or too damaging to recover from (as that would be stupid to do), but we might do something in which there is the risk of losing some times.
Each thing we could do might have a "cost" of some sort (like an investment would but in this case more intangible values).
Anything we do uses up our effort, our time, and also in many cases we incur an actual real world cost in terms of emotional well-being, which is our most valuable thing in our world.
Let's quantify the cost at 10 units each for each thing we choose to do.
And, of course, we would always calculate our "profit" from the value units we get from the result we get MINUS the cost incurred - netting the two for one final net value.
Let's assume that we have already harvested the more certain, higher payoffs and that we are sufficiently in control of our lives to do "first things first" and, thus, we would do the most certain payoffs first.
Now, let's say, we have 10 opportunities to produce some value units. If one out of 10 succeeds, we win big time. (Value units are what we are using to measure life instead of using a dollar as a measure of value.)
This is what it looks like
Number of opportunities: 10 opportunities, each of the same value
Average value per hour: 500 value units estimated
Payoffs are not certain: We estimate that they have a 90% chance of failure.
If we do one of them, it is 90% likely that it will fail and get no value. We will, in a sense, have wasted our time.
So we can stop there (or stop even before that because we want to avoid a loss). (It is certainly reasonable for a person to avoid loss, but it can be wise to take on risks where the odds are reasonable and spread out well. Loss avoidance is a big thing with people and those who cannot put the probable average returns into perspective will often give up a lot of the potential value that will in fact turn into much greater value for life!)
Or we can continue on the road, trusting that in the long term we will average a good return:
But, let's say we can't stand taking a risk and not having a payoff for our efforts.
So instead of doing the above, we do some things that have a payoff for sure each time we expend the effort. Let's say we have 10 net for sure items we can do in that same time as it took to do the 10 items that were risky, and each of the for-sure items had a value of 5 units, if we did all 10 we would get 10 times 5 value units each for a total of 50 units of value.
No risk option: 50 value units in total,
High risk option: 400 value units, net of investment
Which is better?
Clearly, well calculated payoffs and risk selections can and will payoff better over the long term, on the average, if you persist over time.
(Describing in words: If I try enough of the risk opportunites and I've estimated correctly that I have a 10% chance of success in any one of them, if I do 10 of them, one of them will succeed for sure. When it succeeds, I get 500 value units or , after costs, 400 value units.)
In the second no risk example I "win" every time, but in total I only get 50 value units.
Obviously, the first choice would be the best, if one were to apply rational thinking.
The latter choice, the safe choice, would be an unintelligent, unsmart choice IF you were to use your higher brain and used the above rational thinking.
Yes there are costs and losses incurred in the process, but, in perspective over life, we see that we will have sufficient opportunities to average our efforts out to come out ahead of the for-sure no risk strategy. We "take the risk", invest the time and effort and incur the costs to "buy" something of greater value in total.
We bargain for more in life or we accept much less...
THE LIFE ANALOGY
In life, we frequently must "risk" something to get something of greater value over time.
Yes, if we take the risk (and don't risk a ruinous amount on any one uncertain investment), we will win in life.
THE COST OF DISPLACING OTHER OPPORTUNITIES
Most of us in life will "blow" some time totally by doing something of zero value. They think that that is "just a part of life" and say something like "so what, I haven't lost anything - that's just life!"
But what they have actually lost, carelessly and needlessly, is the value that they could have received by using the time to do something of value. By doing the wasted activity, at seemingly no cost, they have actually risked their time and lost the value they could have had, to make life better.
Here we are talking about for-sure losses of potential value because we have not realized the cost of giving up a high value item by displacing it with a low value item!
This is the opposite of what any rational man/woman would do!