If you want to make a
long-term bet
one of your options is to register your bet with the Long Now
Foundation as a Long Bet. They have some rules, which are
roughly:
Both parties put up the same amount, at least $200/each.
Long Bets effectively runs a donor-advised fund (DAF).
When the bet concludes the winner chooses a charity to receive the
money.
The charity gets the initial stakes, plus half the investment income.
While people have all sorts of reasons why they might want to use Long
Bets, one question is: how confident do you need to be for placing a
long bet to result in more money going to your preferred charity than
just putting the money in a DAF now?
Let’s say I claim we’ll have talking horses ten years from now, and
you’re skeptical. You consider betting $1000 against my $1000 via
Long Bets. If you win you’ll get your $1000 back, my $1000, and half
the investment income which (figuring the stock market returns a
nominal 7%) will be ~$967, for a total of ~$2967. On the other hand,
if you had just put your $1000 in a DAF you’d have ~$1967. Is this a
good deal?
Provided putting the money in a DAF for at least that long would
otherwise be your best option, if you’re 100% confident that (a)
you’ll win and (b) Long Bets will still be around, then it’s a solid
deal. You’re up about 50%. On the other hand, the less confident you
are the worse the deal looks:
For example, at 60% confidence you’re neutral at 6 years, and negative
after that. At 75% you’re down to neutral at 16 years. At 90%, 32
years. At 99%, 75 years. For an organization trying to promote
long-term thinking, it’s surprising they would choose a fee structure
that penalizes long-term bets so heavily.
Long Bets by Confidence Level
Link post
If you want to make a long-term bet one of your options is to register your bet with the Long Now Foundation as a Long Bet. They have some rules, which are roughly:
While people have all sorts of reasons why they might want to use Long Bets, one question is: how confident do you need to be for placing a long bet to result in more money going to your preferred charity than just putting the money in a DAF now?Both parties put up the same amount, at least $200/each.
Long Bets effectively runs a donor-advised fund (DAF).
When the bet concludes the winner chooses a charity to receive the money.
The charity gets the initial stakes, plus half the investment income.
Let’s say I claim we’ll have talking horses ten years from now, and you’re skeptical. You consider betting $1000 against my $1000 via Long Bets. If you win you’ll get your $1000 back, my $1000, and half the investment income which (figuring the stock market returns a nominal 7%) will be ~$967, for a total of ~$2967. On the other hand, if you had just put your $1000 in a DAF you’d have ~$1967. Is this a good deal?
Provided putting the money in a DAF for at least that long would otherwise be your best option, if you’re 100% confident that (a) you’ll win and (b) Long Bets will still be around, then it’s a solid deal. You’re up about 50%. On the other hand, the less confident you are the worse the deal looks:
(sheet you can copy and play with)
For example, at 60% confidence you’re neutral at 6 years, and negative after that. At 75% you’re down to neutral at 16 years. At 90%, 32 years. At 99%, 75 years. For an organization trying to promote long-term thinking, it’s surprising they would choose a fee structure that penalizes long-term bets so heavily.
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