Gambling with house money
The time to bet more heavily on ourselves is when we have the benefit of house money.
When we are in the black and feeling good and can afford more risk. This is precisely the time to try new things and maybe even fail in good cause. We are in position of strength, and we have to take advantage of it while we can.
Thaler conducted the pioneering study on gambling with house money back in the early nineties. He asked participants to consider the following scenario.
You walk into a casino. While passing the slot machines, you put a quarter in. Surprisingly, you win one hundred dollars. And so, now what? Will your gambling behavior for the rest of the evening be altered? Might you make a few more serious wagers from your wallet while taking a swim at the pool?
Of course it will. The unexpected hundred dollars alters your behavior. It changes the way you frame options you face in the world.
When my startup fired twenty percent of its staff several years ago, everyone was shitting themselves with fear. And rightfully so. Layoffs are scary and confusing and startling. You barely have enough time to even register what happened before you’re gone in the blink of an eye.
But luckily, we found a way to frame the experience in an optimistic light. Since we still had eight weeks left on our payroll, but very few tasks and no obligation to keep our regular office hours, we essentially earned two months of paid vacation. We were playing with house money.
By doing this basic math, it showed us that there was really no need to panic. And that drastically decreased the pressure we put on ourselves during our job transitions.
Where might you be playing with house money? What fortuitous situation might you be in where you can afford to bet more heavily on yourself?
Remember, all forms of gambling are based on the absolute certainty that, ultimately, the gambler will lose more, over time, than they win.
But when it’s not your money, it’s a whole lot more fun to play.
LET ME ASK YA THIS…
Is now the time to double down on yourself?
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That Guy with the Nametag
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