4 ms·

Taxes alone don't necessarily make it EV negative. For me it wouldn't be since I already have substantial gambling income to deduct from. (Unless you're a profe

Taxes alone don't necessarily make it EV negative. For me it wouldn't be since I already have substantial gambling income to deduct from. (Unless you're a professional gambler, you can't deduct more than you earn.) But you're right, for most people that one particular wager would, assuming they were going to get a 1099 if they won. (Most money made from gambling goes unclaimed, as it doesn't take place in a casino.) Startup investing is somewhat the opposite I suppose, where taxes actually makes it more profitable. If you lose, you can deduct the loss, if you win, you usually pay the much lower capital gains taxes. (Unless I'm misunderstanding the tax ramifications of a losing angel investment, which I may certainly be.)

diego 18y ago
Taxes were just an example. My issue is when you say: Life will present you with many different wagers with positive expectations and then you give the example of a startup. The problem is that you make it sound as if it's always easy to identify the wagers with positive expectation. Of course if you pick enough wagers with positive expectation you will come out ahead, but other than for chance games you simply don't know the expected value of your gamble. The closest you can get is by looking at past returns for certain well-known investments and hope that the future returns will be similar. For most "wagers" there isn't enough data.