Every day, we think through more than 35,000 decisions. What should I eat today? Should I reply to that message right now? Should I play pickleball this afternoon? Is it time to cut my losses?

For small decisions, you can absolutely go with your gut. Maybe you watch Netflix after dinner, or order an iced black coffee instead of one with condensed milk. Whatever. Nobody really cares about those things.

But with major decisions involving your career, investments or relationships, relying on instinct alone can lead to terrible choices. So I want to share a few approaches I have used when making important decisions.

1. Expected value

This is the most important concept for me. The basic idea is that every decision you make has possible outcomes. Each outcome has a probability and a corresponding payoff. Multiply each probability by its payoff, then add everything together, and you get the expected value.

EV = Σ(probability × payoff)

Suppose your best friend invites you to play a coin-toss game. If it lands heads, your friend wins VND 100,000 from you. If it lands tails, you win VND 150,000.

Most people would hesitate or even refuse as soon as they hear they could lose VND 100,000. But if we do a little math, the expected return is positive:

EV = (50% × 150,000) + (50% × -100,000)
= 75,000 - 50,000
= VND 25,000

So each time you play, it is as though you are earning VND 25,000 for free in expected value. Play 100 times, and your expected profit is VND 2,500,000. On those terms, I would find it hard to turn down.

Or perhaps you are wondering whether to leave your job and start an affiliate business or a startup. We can make a basic comparison:

Option A: Stay at your company and earn VND 70 million a month.

Option B: Spend two years building an online business, with a 50% chance of success that earns you VND 200 million a month, and a 50% chance of failure that leaves you earning VND 30 million a month from a side hustle over the same period.

EV of A = VND 840 million per year
(100%, because you stay in the job)
EV of B = (0.5 × 2,400,000,000) + (0.5 × 360,000,000)
= VND 1,380,000,000 per year

Under these assumptions, option B looks better over the long term and offers more room for career growth. But because it sharply reduces your income in the early years, most people would stay with option A because it feels safe.

I am not saying you should jump into anything just because it has a positive EV. Things can turn out differently. If a failed attempt would leave you broke, with nowhere to turn and no money for food, you are better off not pursuing it, even if the expected value is positive.

2. The sunk cost fallacy

Imagine you are at the cinema. Your ticket, popcorn and drinks cost VND 500,000 in total.

Thirty minutes into the film, you realize it is terrible. What do you do now? Get up and leave, or force yourself to stay for another 90 minutes?

The sensible answer is to leave and find something more enjoyable to do with the next 90 minutes. But most people do not do that. They stay through the rest of a terrible film because they do not want to waste the VND 500,000 they have already spent.

That is the sunk cost fallacy. Many of us fall into it, and it makes both our experiences and our quality of life worse.

• You stay in a job you dislike for another three years because you have already spent five years at the company since graduating. The truth is that those five years are already gone. The question should be how to make the next three years of your working life better.
• You keep holding an altcoin after it has lost most of its value, telling yourself you cannot cut your losses now. Ask yourself: if you had that money in cash today, with the market feeling the way it does now, would you buy at this price? Or would you wait for a lower price and a better market? If you would not buy now, perhaps it is time to cut the loss.
• You stay in a toxic relationship because “we have been together for three years.” Those three years have already passed anyway. The question is: can the next three years be better? Can they be happier?

The way out is simple: whenever you make a decision, pretend you are starting from zero right now. Ignore everything you have already put in, whether time, money or emotion. Think about the future. Knowing what you know, would you choose this path today? If the answer is no, walk away. The past is not coming back either way.

3. Survivorship bias

You read a story about someone who dropped out of college and built a billion-dollar company. Inspiring, right? Maybe college is just a waste of time?

But nobody tells you about the other 10,000 people who also dropped out and are still struggling to make a living. They do not appear on magazine covers or get invited onto podcasts. They quietly struggle while all the attention goes to the rare success story, someone like Bill Gates or Steve Jobs.

That is survivorship bias. When we only see the winners, it is easy to overestimate our own chances of winning.

It shows up everywhere.

• On Twitter: Everyone shows off their profits. Hardly anyone posts their losses. Someone who turns $500 into $50,000 might get 200,000 likes. Meanwhile, 500 others who turned $500 into zero may have quietly deleted their accounts. Your feed makes it feel as though everyone is making money. They are not. Whether in meme coins or altcoins, 87% of traders suffer heavy losses. Only a small minority actually make money.
• In the restaurant industry: People say, “Follow your passion and open a restaurant!” But 60% of restaurants close in their first year, and 80% are gone within five years. The survivors become your favorite places. Nobody remembers the ones that failed. “Follow your passion” sounds wonderful, as long as we ignore all the passions that went bankrupt and faded away.
• In music: “Just put your music on Spotify and one day you will go viral!” Around 90,000 new songs are uploaded to Spotify every day. The median song gets only about 30 plays in total.

You know about the viral songs because they went viral. The other 89,990 disappear into silence.

The solution is simple: whenever someone uses a success story as proof that a path works, look for the probability of success.

How many people tried? What percentage actually succeeded?

If you cannot find the odds, start by assuming the success rate is very low. The world loves showing you the winners. It rarely shows you everyone who entered the game.

4. The Kelly criterion

All right, suppose you have done everything above. You have calculated expected value, checked for sunk costs and accounted for survivorship bias. After all that, you have found an opportunity genuinely worth trying.

How much should you bet? Most people seem to know only two approaches: too much or too little. They either go all in because they feel “sure to win,” or commit a tiny amount because they are afraid of losing money. Neither makes much sense. There is a formula that helps you work out how much to stake on an opportunity like this.

f* = (p × b - q) / b

p = probability of winning
q = probability of losing (= 1 - p)
b = how much you win per dollar risked

For example, you find an investment opportunity where you believe you have a 60% chance of winning. If you win, you double your money (b = 1).

f* = (0.60 × 1 - 0.40) / 1 = 0.20

In this example, the Kelly calculation gives a stake of 20% of your total capital.

But from what I have read, most professional and quantitative traders use no more than quarter Kelly or half Kelly. So instead of 20%, the stake would be 5% to 10%. It is not especially exciting or huge. You will not get rich tomorrow. But you will not go broke next week either.

By the way, I see the same idea applying beyond money:

• Career: Do not quit your job to throw everything into a side project. Cut down to four working days a week and give the project one day. Think of that as roughly quarter Kelly.
• Learning: Do not try to learn five new skills at once. Choose the one with the highest expected value and go deep.
• Relationships: Do not spread yourself across 20 shallow friendships. Invest deeply in the four or five people who really matter.

The principle is this: when you have an edge, concentrate. But not too much. Leave room for being wrong.