Title: Is a "Safe" 3% Return Worth Sacrificing $500,000 of Potential Upside? Use Expected Utility to Decide Tagline: Is a "Safe" 3% Return Worth Sacrificing $500,000 of Potential Upside? Use Expected Utility to Decide. Problem: After selling his landscaping business for $5 million, Robert, age 62, is grappling with investment choices. He's considering two options: a conservative bond portfolio yielding a guaranteed 3% annually, and a more aggressive mix of stocks and real estate offering a potential 10% return, but also carrying a risk of a 5% loss in any given year. Robert is risk-averse and unsure how to weigh the potential gains against the potential losses. He is unsure how to quantify which investments offer the best risk adjusted return, given his personal risk tolerance. Solution: Using the Expected Utility Calculator, Robert can input the potential returns and probabilities of each investment option, along with a utility function reflecting his individual risk aversion. This provides a clear, quantifiable measure of the utility he would derive from each choice, allowing him to make an informed decision that aligns with his comfort level. ROI: By using the Expected Utility Calculator, Robert discovers that while the bond portfolio appears "safer," the stock/real estate mix, even with the risk of loss, offers a higher expected utility given his calculated risk tolerance. He gains the confidence to allocate a portion of his capital to the higher-yielding assets. He can reasonably expect to increase his annual return by approximately $35,000 per year which over 10 years of investing generates $350,000. He now fully appreciates his risk appetite and feels fully confident in his ability to manage his newfound wealth and retirement strategy. Description: Selling your business is a once-in-a-lifetime event. Our Expected Utility Calculator helps you quantify your risk tolerance and make the optimal investment decisions for your $5 million windfall, ensuring you don't leave money on the table or take on excessive risk. Category: Lead Gen