3 ms·
40% chance to double your money in 4 years is an expected value of 20% compound growth a year. Seems like a solid bet vs VTI
by hackernewds 2y ago
40% chance to double your money in 4 years is an expected value of 20% compound growth a year. Seems like a solid bet vs VTI
- dahinds 2y agoYour calculation assumes that the other 60% of the time you get to keep your original investment, but there's a good chance that you lose it all. This is also the calculation for an investor, and is not really relevant for an employee option holder.
- thedufer 2y agoIn fact, it sounds like the 40% includes all exits, including those that returned only 1x. That would mean that the 60% is all 0s, and that the chart shows a negative total return in all rows, without even discounting for the holding period.
- jawns 2y agoBut the way it works per individual is that you have a 40% chance of "winning" and a 60% chance of losing your investment completely. VTI carries the risk that your investment could lose value in the short term, but over a longer time period, I'll take VTI over stock options any day.
- deschutes 2y agoBetter odds and no work at a game of chance. That's pretty damning.
- lostemptations5 2y agoThis really depends on an individuals risk tolerance.
- baq 2y agoVolatility adjusted is probably quite shit.
- repsilat 2y agoThis math is way off. _Guaranteed_ doubling in 4 years is a 19% per annum return. If the "not doubling" case is "break even" (generous) then the expected growth is under 10% per annum.