So, if you think borrowing money is a good idea consider the below chart.
First we spread the standard deviation for a game of HiLO Full index 6d Hat DAS 75% penetration with a 1-12 ramp over a distribution of rounds until we achieve N0 at 2 SD. As you can see, we overcome 2 SD at the end of the chart.
AND IT ASSUMES YOU ARE PLAYING LIKE A COMPUTER!
Then we assume we borrow $75,000 (a normal bankroll is less than 1% RoR) for 12 months at 6% interest and monthly payments of $6,455.
Then we develop two lines of cash flow, one assuming we are operating at -1 SD and making the loan payments and the other assuming the same at -2SD. Both standard deviations were adjusted by our positive cumulative EV.
You can see where cash flow goes negative in the -2 SD case and we are out of business! Also note the remaining cash at the end of the ride.
Before making such a decision, do your own “down side” analysis and be prepared for the ride that may come.
Best of Luck
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N0 |
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N0 @ 2SD |
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Rounds--> |
500 |
12,183 |
23,867 |
35,550 |
47,234 |
58,917 |
70,601 |
82,284 |
93,968 |
105,651 |
117,335 |
129,018 |
140,701 |
152,385 |
164,068 |
Loan
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1 SD |
(2,839) |
(7,156) |
(5,205) |
(1,819) |
2,319 |
6,941 |
11,909 |
17,138 |
22,575 |
28,182 |
33,931 |
39,802 |
45,778 |
51,847 |
57,998 |
$75,000 |
6.00% |
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2 SD |
(6,031) |
(22,913) |
(27,258) |
(28,735) |
(28,705) |
(27,708) |
(26,021) |
(23,810) |
(21,184) |
(18,218) |
(14,967) |
(11,472) |
(7,767) |
(3,877) |
177 |
Interest$ |
$4,500 |
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Loan Payment |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
(6,455) |
0 |
0 |
0 |
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75,000 |
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-1SD Cash Flow |
72,161 |
54,934 |
50,430 |
47,361 |
45,044 |
43,212 |
41,724 |
40,498 |
39,480 |
38,632 |
37,926 |
37,342 |
43,319 |
49,387 |
55,538 |
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75,000 |
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-2SD Cash Flow |
62,514 |
39,177 |
28,377 |
20,445 |
14,020 |
8,562 |
3,794 |
(450) |
(4,279) |
(7,767) |
(10,971) |
(13,932) |
(10,227) |
(6,337) |
(2,283) |
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Estimated Table Hours @100HPH |
5 |
122 |
239 |
356 |
472 |
589 |
706 |
823 |
940 |
1,057 |
1,173 |
1,290 |
1,407 |
1,524 |
1,641 |
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