Risk vs Reward, made practical

Most decisions feel hard because your brain is trying to compare different units: money vs time, status vs stress, “what if” stories vs real constraints. The goal of this tool is not to be perfectly precise — it’s to be consistently useful. If you can make a decision with 70% clarity instead of 20%, you’ll move faster, learn sooner, and waste less energy.

The planner uses two layers: (1) Expected Value to capture the “mathy” core — probability times upside, minus probability of failure times downside — and (2) Risk Adjustments to reflect real life: slow outcomes, irreversible commitments, weak information, or high effort should reduce your “go” score even if the expected value looks exciting.

“Probability of success” is your honest estimate: out of 100 similar attempts, how many would work? If you’re not sure, pick a conservative number. You can also think in ranges: maybe it’s 30–60%. Use the midpoint today and update later as you gather evidence.

Upside and downside are on a 1–10 scale because different decisions have different currencies. A 10 doesn’t always mean “million dollars” — it means “this is huge for me.” A 1 means “this barely matters.” This keeps the tool flexible: you can plan a job switch, a product launch, a relationship decision, or a habit change using the same mental model.

Then the tool asks four “reality questions” that tend to change outcomes in the real world: Time to outcome (fast feedback is better), Reversibility (experiments are safer than one‑way doors), Information confidence (better data means fewer surprises), and Effort required (high effort increases failure risk and drains your attention from other goals). Finally, Values alignment matters because the best “deal” can still be wrong for you if it costs identity, relationships, or health.

• Decision Score (0–100): your risk‑adjusted “go” signal.
• Expected Value index: a quick “upside minus downside” summary on a -100 to +100 style scale.
• Next steps: 3–5 actions that usually increase certainty quickly (pilot, pre‑sell, ask experts, reduce downside).

The scoring formula (transparent on purpose)

The tool computes a simple expected value estimate first, then applies adjustments that typically matter in practice. The final score is intentionally easy to interpret. It’s not a scientific truth — it’s a consistent yardstick.

We convert your upside and downside (1–10) into a comparable scale and combine them with probability:

• p = probability of success (0.01–0.99)
• U = upside size (1–10)
• D = downside size (1–10)
• EVraw = p×U − (1−p)×D
• EVindex = normalize EVraw to a -100..+100 style index

Then we compute adjustment multipliers (all on 0..1 range) and combine them:

• Time factor: faster outcomes score higher (long time reduces score).
• Reversibility factor: reversible decisions score higher (one‑way doors score lower).
• Confidence factor: better info = fewer surprises.
• Effort factor: higher effort reduces score.
• Alignment factor: higher alignment increases score.

The score blends the “math” core (EVindex) with practical factors:

• BaseScore comes from EVindex (mapped to 0–100)
• AdjustedScore = BaseScore × (0.35 + 0.65×Adjustment)

Why the 0.35 floor? Because a decision can still be worth exploring even when one factor is weak — but the tool strongly penalizes combinations that are slow, irreversible, uncertain, and effort‑heavy.

Three examples you can copy

The best way to use this planner is to compare options side‑by‑side. Below are three realistic examples. Notice how the “right” answer often depends on reversibility and time-to-feedback — not just the upside.

You’re considering a job change. You estimate a 60% chance the new role is a big upgrade (better manager, more growth). Upside is 8/10. Downside is 6/10 (stress, poor fit, opportunity cost). The decision is moderately reversible (you can leave), but it takes time to know if it’s great (time 6/10). Confidence is 5/10 because you haven’t talked to enough people there. Effort is 5/10 (interviewing, ramp-up). Alignment is 7/10.

The tool usually outputs a “proceed cautiously” score — not because it’s bad, but because the information confidence is low. The best next steps are obvious: do a pre‑mortem, talk to current employees, and negotiate a trial period or a clear 90‑day plan.

You think the chance it becomes a meaningful income stream is 25%. Upside is 9/10. Downside is 3/10 (mostly time). Time to outcome is 7/10 (can take months). Reversibility is 9/10 (you can stop). Confidence is 4/10 (no market proof yet). Effort is 6/10. Alignment is 9/10.

Even with low probability, the reversibility and alignment can keep the score high enough to justify an experiment. The tool’s next steps tend to push you toward validation: build a small landing page, pre‑sell, or run a tiny test ad. Your goal isn’t certainty — it’s fast learning.

Probability of success feels like 45% (maybe it helps; maybe it doesn’t). Upside is 6/10. Downside is 5/10 (money + time). Time is 4/10 (you’ll know soon). Reversibility is 3/10 (hard to undo). Confidence is 3/10 (marketing claims, limited evidence). Effort is 4/10. Alignment is 5/10.

The tool usually gives a lower score, and the “fix” is not emotion — it’s structure: ask for a refund policy, request a syllabus, talk to 2–3 real students, and compare alternatives. If you can’t increase confidence or reversibility, it’s often a pass.

Frequently Asked Questions

• Is this a finance tool or a psychology tool?

  Both. The core idea is expected value (finance), but the score also includes behavioral reality checks (psychology): reversibility, confidence, and effort.

• What does “time to outcome” mean on a 1–10 scale?

  It’s “how long until you get meaningful feedback.” A 1 means you won’t know for a long time (slow feedback). A 10 means you’ll know quickly (fast feedback). Fast feedback reduces risk because you can pivot sooner.

• Why not ask for exact dollars?

  Exact dollars are great when the decision is purely financial. Many life decisions aren’t. The 1–10 scale lets you compare different types of outcomes without pretending you can precisely monetize everything.

• What score should I act on?

  As a rough guide: 0–44 is usually “avoid or redesign,” 45–64 is “proceed cautiously,” 65–79 is “go with a plan,” and 80–100 is “strong yes.” But your context matters — especially responsibilities and risk tolerance.

• How do I use this to compare options?

  Run each option once and save the snapshot. Then compare: Which option has higher expected value and better reversibility/feedback? If an option’s score is low, ask: “What one change increases it the most?” That’s often the best path.

• What if I’m anxious and my downside slider is always high?

  That’s normal. Try a pre‑mortem: list the top 3 failure modes and add mitigation steps. Often you can reduce downside without changing the upside — by limiting exposure, setting boundaries, or making a smaller bet first.