Calculating Returns

Morphy

Well-Known Member
#1
Can someone point me in the right direction in regards to calculating returns and general payout of investments?


Example


I invest $10,000 and a family member/friend/employee invests $40,000

total bankroll $50,000

how do i estimate gains based on projected hours with that bankroll?


whats the general rule in "paying dividends" (not sure what else to call these) as hours and money are accumulated.

yearly.quarterly? and whats a typical % if any...

I apologize if thats a terrible example....
 

sagefr0g

Well-Known Member
#2
probably the most important equation i ever learned was:
% = (p/w)*100% where p = part and w = whole
you could go by hours, days, weeks, months, years, ... ect.
let's say your investment has a 2% per hour advantage, payoff, return, whatever you want to call it
so it depends on the amount of money per hour you are able to put across the 'table' so to speak. what you can 'invest'/hour
say you can push $100/hr across the 'table' then p is what you can make and the $100 pushed across the table is the whole or w.
then you have 2% = (p/($100/hr)) * 100% which is the same as p = (2%/100%)*$100/hr so p = 0.02 * $100/hr or p = $2/hr in other words you make $2/hr on your $100 invested each hour
you invested $10,000, there are $10,000/$100 = 100 benny's in your ten grand. so you'd take 100 hours to invest your part and make ($2/hr) * 100 hrs = $200
your family/ friend/employee invested 4 times as much as you, their investment would take 400 hours to invest and they'd make 4 times as much as you did or $800
so all together the team would make $1,000 as a result of investing $50,000 over a period of 500 hours at a rate of investment of $100/hr . simply put, if you can push that $50,000 across the table, the return is expected to be 2% of that 50 grand or $1,000 .
so it's just some more arithmetic to figure out days, weeks, months and years, sorta thing.
say your willing to 'invest over the table' five days a week at a rate of 10 hr's a day
then you could get $1,000 a day across the 'table', $5,000 a week across the 'table' ect. ect. ...
anyway, $5,000 a week invested at 2% return you'd get p = (2%/100%)*$5,000/wk = $100/wk
you get a fifth of that or $20 and the others get $80 (4 times as much as you)
now say your investment doesn't pan out, and you lose some of that $50,000 set aside to invest.
well what ever is left, you get 1/5 th of it back and the others get 4/5 th's back since you invested $10,000 and they invested $40,000 since $10,000/$50,000 = 1/5 and $40,000/$50,000 = 4/5
but if say you are doing all the work of investing, then you may feel entitled to charging your your family/ friend/employee what have you?, a fee or a percentage. but that's just a matter of some more arithmetic. what a 'customary' fee might be, i couldn't tell you.

speaking of arithmetic, my fifth grade math teacher always used to ask me, "did you check your math?" my answer was always, no mam. same with above, if i got it wrong, i apologize.
 

Meistro

Well-Known Member
#3
Typically what you do is play until the bankroll is doubled, then you break. So in this case you play until you win 50k. Then you split the money 50/50 between players and investors. So in your example you would get a 20% investor share and a 100% player share. 5k + 25k and the other guy would get 20k.

"how do i estimate gains based on projected hours with that bankroll?"

you sim the game.

So for example let's say you have a 50k bankroll and find a pretty good game, with a 1.5 deck cut, S17, DAS and late surrender. You play with a pretty safe 3% ROR and earn $110 per hour. Now you could do even better than this, by playing heads up and getting in more hands per hour or finding a game with better rules, fewer decks cut off or both. And you should receive some dealer errors as well that this doesn't calculate. Another thing this simulation doesn't look at is expenses which increase ROR and decrease your hourly rate.
 
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