I think NYC is globally recognized enough that I’m fine not saying USA.

It’s like if someone said Berlin, Tokyo, or Moscow. Everyone understands what you mean.

Serial numbers are going to make that hard. Just duplicate gold bars. Only 1 ingredient and very easy to liquidate.

Just make pure gold bars. Easy to liquidate and only 1 ingredient.

If I were you, I would just blatantly disregard my parents at this point. If I got grounded for something that my brother wouldn’t have been grounded for. Just go out anyway. If I’m told to clean the house, but my brother is allowed to do whatever he wants, I would clean exactly half and refuse to do another chore until he matches what I’ve done.

I’d basically just become a petty monster until they changed or I moved out.

As an American, I've only been in a car that didn't have an automatic transmission once.

I'm American and don't think I've ever called anyone sir or ma'am. This must be a southern/midwestern thing.

Actually it just means every other week. Semiweekly means twice a week.

You can set up a daily automatic deposit to your brokerage that automatically invests in a mutual fund. So yes, I would.

$200/day is the objectively correct answer.

Don't understand why people would choose any of the other options and give others 0% interest short term loans.

r/financialindependence - I'm targeting 45 as expected retirement age. Give or take 5 years due to market timings.

I don’t think I would. I’d be bummed for sure, but a 60% chance at $3m is clearly the right choice for me and I’d get over it knowing I made, what I believe to be the correct decision. If I lost and then afterward they told me I could have 1 more chance or take the $500k, I’d run it and go for the $3m again.

It’s like playing poker and calling an all-in when you flop a straight. You know you’re ahead. You know that calling is the correct decision. But sometimes the other guy just hits his outs and you lose. It sucks, but you get over it because you know you made the optimal decision.

You’re not giving up $500k. You are giving up a 50% chance at $500k which is very clearly not the same thing

I’m using 45 as the age because that’s the year I’m projected to my retirement goal which also just so happens to be $3mm.

Obviously there is marginal utility beyond the $3mm retire now money, but there was no option greater than $3mm so I chose to ignore that because I would have to create a way to value the additional money.

In you’re deal or no deal scenario, you are losing money by declining the offer so why would I take it? I’m not giving up $500k guaranteed for a 1/8 chance at $3mm. That’s an EV of -$125k. To have a proportional EV to OPs post the deal would have to be:

Howie offers me $500k, there are 5 cases left, 3 contain $3m and 2 contain nothing. That gives and EV of $500k to take the money and $1.8mm to take a case which is proportional to the $250k for option 2 and $900k for option 3.

In that situation I take a case.

But this isn't taking into consideration the law of diminishing returns that I mentioned. I would estimate that 50% of the utility of the winnings comes with the first $1m and at least 45% comes with the next $2-4 million.

Once you make sums extreme the extra utility gained isn't worth such a sharp decrease in your chance of winning.

I could do the reverse. Would you rather have $.01 or a 0.1$ chance at $100. I bet everyone picks the $100. That's because there is no loss in utility from the amounts being that low and the $100 is a much higher EV option.

Playing the Powerball doesn't make any sense? The odds are too low and it's -EV, so on average it would delay my retirement date.

I'm not missing any point. I'm well aware of the odds, but the payout increase is high enough as to justify the decreased win rate while not going so extreme as to have to contend with the law of diminishing returns.

I just treat every dollar saved as time bought and translate expenditures and windfalls into how much time they cost or save me.

The $3m saves me ~20 years with a 30% chance of happening. (6 years on average).

The $500k saves me ~7 years with a 50% chance of happening (3.5 years on average).

The chance if winning the powerball is ~1/300m, so unless the jackpot is over $1B, it's likely -EV to play and will, on average, delay retirement by more than it saves.

Broken down this way, for me personally, I couldn't justify not picking the $3m.

I'm actually relatively early in my career (make high 5 figures) and my net worth is less than $75k because I have been aggressively paying down debt. I just have a very high savings rate and plan to get to my FIRE number at ~45 give or take a few years due to market timing.

I just treat every dollar saved as time bought and translate expenditures and windfalls into how much time they cost or save me.

The $3m saves me ~20 years with a 30% chance of happening. (6 years on average).

The $500k saves me ~7 years with a 50% chance of happening (3.5 years on average).

Broken down this way, for me personally, I couldn't justify not picking the $3m.

Realistically 75k would pay off my student loans and be a nice start on saving for a downpayment on a house, but not really going to affect my life very much. Moves retirement up 1 year.

500k could straight buy me a house and would be amazing to have. Getting 500k today would move up retirement about 7 years.

$3m would be enough to quit my job, buy a house and never work another day in my life. Aka move retirement up 20 years.

For me personally the 3 choices look like this:

Option 1 - 75% chance retire at 44, 25% retire at 45

Option 2 - 50% retire at 38, 50% retire at 45

Option 3 - 30% retire today at 26, 70% retire at 45

When you break it down this way, it’s a pretty easy decision to make at least for me. I pick option 3 every time.

I would argue that the $3m is the correct option regardless, but with “a bunch of friends” it is the only choice.

If you have a traditional 401k and max it out then there is no reason to have a traditional ira because you lose the ability to deduct contributions from your income. Since OP said they are contributing half their $55k income to 401k, they are maxing it out. Therefore it id a ROTH ira not a traditional ira or OP is making a very big mistake

$3m is $120k/year indefinitely. I think that would last my whole life

$1m is a 40k draw per year in safe investments. r/leanfire actually caps their retire early amounts at $1m. If you go to r/financialindependence the normal retire amount is $2-3m. A 7 figure net worth can absolutely last your whole life.

The value of the choice still holds provided the marginal utility of the additional money is worth more than the decrease in your chance to succeed.

They are not the same. ROTH contributions can be pulled out penalty free, while 401k is subject to 10% penalty unless you pre-plan your withdrawal by using a ROTH conversion ladder or similar withdrawal strategy

If you have more than 1 chance not taking the $3mm just flat out the incorrect decision.

Well if you look at it in absolute terms then yes the 20% chance at $10b will net more money, but that ignores the law of diminishing returns. The first $1b (actually the first $1mm) provides most of the utility. Above $5mm the utility gained from additional money is minimal, so in that proposition, the chance of success for the utility gained isn't worth the trade off.

In the question posted, $75k vs $500k vs $3mm, the diminishing returns aren't really a factor since the sums aren't astronomical, making the EV calculation much more reasonable.