A Risky Question

by Kevin on April 14, 2008

man in black suitRiddle me this: imagine yourself enjoying a peaceful Saturday afternoon. You’re sitting on your back porch with your laptop, catching up on some articles at NoDebtPlan.net. As you contemplate how to invest your money — 401k or Roth 401k? — the doorbell chimes throughout the house. You meander to the door and find a stranger in a black suit waiting. It’s an older, wealthy looking gentleman holding two metal briefcases. He smiles.

“It’s your lucky day. In the briefcase in my left hand, I have $250,000. You can win that money, no questions asked, if you flip a coin and call heads or tails correctly before it lands.

However, in my right hand I hold another briefcase. You can take it without having to flip any coins. It holds $_________.

Which briefcase do you want?”

The real question I have for you today is, how much money does the second briefcase need to hold for you to take it over the first one? $1? $10,000? $249,999?

So, what’s your number? Leave a comment and we’ll revisit this post in a few days.


Mike April 14, 2008 at 7:28 am

I’d take the second briefcase if it contained at least $125,000 (I guess this would be equal to flipping a coin for $250,000). Otherwise I’d flip the coin and go for $250,000.

If I needed money, this would surely change my answer…

But the truth is I don’t bother answering the door unless I’m expecting someone; so I guess I’d get $0.

Mom @ Wide Open Wallet April 14, 2008 at 10:08 am

hmm.. this is very deal or no deal. I think if someone was standing at my door offering $25,000 I might have to take it. I know that is really low, but it would pay off my van and that would make a huge difference around here. UG.. but the $250,000 would pay off everything I own. Either way, $25,000 would be my tipping point.

Jeremy Davis April 14, 2008 at 10:19 am

I’m kinda with Mom on this. I’d take the second briefcase if it held enough to cover most my non-mortgage debts.

Plus, coins hate me.

Amphritrite April 14, 2008 at 12:25 pm

Let’s see… tails never fails! (Kidding)

The second briefcase would have to hold more than $200. Why? Because $200 is the “extra” that I have after bills each paycheck, garunteed. For me, I’d love to double that number, even if it was only once. It also seems like the mark where a “small” amount becomes a “large” amount in my head.

Sure, I’d love for it to have $10K in it, so I could pay off my debt, but the lesson here is that greed does not become anyone. Never look a gift horse in the mouth. Always count your blessings.

If your blessing is worth $200 garunteed, then smile, thank the man, and take the money.

The other briefcase, with the quarter-of-a-mil in it is a dangerous proposition. Think about it like waking up in the morning and going, “Today, I’m going to find $5,000.00 on the street.” You either will, or you won’t. You have no power to sway the odds your way, and a yes/no bet is never, ever worth it.

The only upside to this scenario is that you haven’t put any money on the proverbial table. I could consider a coin toss for this and only this reason: I have nothing at risk. If I walk away empty-handed, I walk away with exactly what I walked in with.

Lynnae April 14, 2008 at 9:50 pm

I’d take it if it were $20,000, because that would pay off all of our debts and give us a decent emergency fund.

If I were out of debt and had a comfortable emergency fund already, I’d be gutsy and flip the coin. I figure I don’t have anything to lose, so why not go for it all? I could buy a starter home with cash for $250,000. Anything less, and I’d still have to take out a mortgage.

Stephanie @ PoorerThanYou April 14, 2008 at 10:33 pm

So the question basically is “how much money would it take for you to give up a 50% chance at $250,000?”

Probably $10,000. That’s would make a big enough dent in my student loans that I would feel comfortable getting on-campus housing, and stop driving my car, which is something I really, really wish I could do for my last year in school (for environmental reasons more than anything else – I hate having a 16 mile commute in an inefficient car, just because I can’t afford anything else).

Seb April 15, 2008 at 5:57 am

I’d have to say $100,000. It’d be enough to pay off our student loans, and the remainder would be used for 20% down on a house.

Hey, I can dream, right?

Eric April 15, 2008 at 8:51 am

$10,000 would probably do it for me. That’d be one hell of a day and an easy, large contribution to my retirement account. Anything less than that and I’d roll the dice.

Patrick April 18, 2008 at 11:25 am

First, I’d offer the man a beer. He must be thirsty after standing outside. Then I would sit and talk to him for a few minutes, kinda get to know him as well as you can get to know someone in a short period of time.

Then, since I have no idea why he is offering money to me, I would ask about his intentions for the money and why he was offering it to me. There must be a good reason.

Then I would probably just take whatever is in the other briefcase – mostly because I think the offer would be sufficient to meet whatever reason he is offering me the money.

I’m sure there is a mathematical number for the “correct answer,” but there is also the answer you would be comfortable with. I think I can make $1,000 relatively easily, nor am I in dire need for $1,000. So at that price, I would roll the dice.

I’m not sure what my tipping point would be, but if I had to put a number on it, maybe $10,000. Honestly, how often has someone just offered you $10,000 no strings attached? That would be difficult to turn down.

$250,000 is life changing money for 99% of the world, and it would be for me too. But would I turn down a guaranteed $10,000? Probably not.

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