EV in Your Actual Life

Try expected value on three real decisions. Your car makes a noise: a mechanic says there is a 20% chance of a serious $2,000 fix and an 80% chance it is nothing. EV of ignoring it: 0.2 × (-$2,000) = -$400 — worse than paying $150 for a diagnostic.

A side project has a 70% chance of earning $0 and a 30% chance of earning $30,000. EV = 0.3 × $30,000 = $9,000. Subtract what your hours are worth elsewhere; if that exceeds $9,000, skip it. Run the numbers, make grounded decisions.