The Data-Driven Life
Living life by the numbers

Exploit Sunk Costs

A while back, I bought a one-month Kindle Unlimited subscription for $9.99. You probably know the deal: through Kindle Unlimited, you can read as many Kindle e-books as you want for just that one $9.99 payment, but only certain books participate in this program, so you don’t exactly gain access to all of the latest and greatest best-sellers.

Once I paid my $9.99, I was highly motivated to start reading. Within two weeks, though, I had blasted through about two dozen ebooks about everything from teaching to mathematics to marketing. By now, I was realizing that the selection of ebooks participating in Kindle Unlimited was fairly weak. I had already read most of what had caught my eye.

But I was committed. I had paid the $9.99, and by golly, I was going to make the most of it.

By the end of week 3, I was reading material of incredibly iffy quality. Finally it hit me: I was wasting my time. My sunk costs of just $9.99 were driving me to read books I would never otherwise give a second glance. To not read for even one day felt like throwing away 33 cents, and it was causing me to waste time worth far more than that.

We all know what they say: Ignore sunk costs. The $9.99 had already been spent, and as a result, it should no longer influence my decision-making process. If a book wasn’t worth reading, the optimal thing for me to do was to not read it. So I stopped. By the final week of my Kindle Unlimited subscription, I even went ahead and paid for a better book that I actually did want to read. I finally managed to ignore sunk costs.

Knowing how difficult it is to ignore sunk costs (even for just 33 cents per day), we can actually use sunk costs to our advantage. Want to get in shape, but can’t find the motivation to work out regularly? Buy a one-month membership to a local gym. Now you’ll be compelled to go just to avoid wasting money. Want to guarantee that you’ll lose weight? Place a bet on it and your chances of success will soar.

Ignore sunk costs is good advice, but here at The Data-Driven Life, we advise you to take it one step further: Exploit sunk costs.

Winning Free Money through Skill Gaming

Over the past 16 years, I’ve profited more than a quarter of a million dollars (!) through skill gaming. While I can’t promise you those results, I can definitely hand you hundreds of dollars per year on a platter, even if you are absolutely terrible at gaming. If you find that you’ve got some skill, your profits can increase from there.

Again, this is a situation where “common knowledge” is wrong — “Online gaming is rigged! Everyone cheats and there’s no way you can win!” It’s also a spot where we can look for +EV opportunities and exploit them to their fullest. Here’s how.

GameDuell: Our skill gaming journey begins at because they generously allow you to play a free game every single day against “the joker” where you can win 50 GameDuell dollars (G$) for beating a set score. (50 G$ are worth about 60 cents in USD.) The games on this site, too, are simple ones that you may already know how to play, including things like Solitaire, a knock-off of Tetris, and a version of Yahtzee.

As part of my Miracle Morning routine, I love to begin each day by earning some amount of side income. (On a side note, if you’ve never read The Miracle Morning, I highly recommend it!) Winning my free GameDuell game is a fun way to make that happen.

To be able to play for and win real money on GameDuell, you’ll have to make an initial deposit. Deposit $10 onto the site, and then you’ll never need to deposit again, because all future GameDuell dollars to play games will come from your free daily wins. Once you’ve won some daily games against the joker, find one game to excel at. You’ll have to play through your free game winnings once before they can be withdrawn.

Even if you aren’t very good at any of the games, your rank will drop until you get matched with other less-skilled players, meaning that you’ll still win a decent percentage of the time. If you are able to beat the joker even half of the time, that will be a free 182 x $0.60 = $109.20 per year that you can use to play games on this site. Again, if you have a spouse or significant other willing to join as well, this amount could be doubled. The next stop on our skill gaming journey is To begin winning on this site, you’ll want to make the maximum initial deposit of $30, because they give you a free $15 bonus when doing so. Turning your bonus money into real money on this site is actually an interesting trick.

When you try to withdraw, you’ll see a screen that looks like this:

Notice that your bonus money becomes “Non-withdrawable funds” that cannot be withdrawn. But there’s one catch: when you make a deposit, your non-withdrawable funds can never be more than your current account balance. In other words, if you lost all of the money in your account balance, and then you deposited another $10 (with no new bonus), your non-withdrawable funds would go to zero.

We can exploit that phenomenon. On RoyalGames, you can play tournaments against other people, or you can challenge individuals directly. What we need to do is spend all of our money challenging other players, taking our account balance down to zero (or as close to zero as possible). To do that, we must first earn 500 jewels (which can be done through free games). We want to challenge people who will NOT accept our challenges so that our entry fee eventually gets refunded to us. Look through usernames to find someone who hasn’t been on the site in years (or better yet, challenge a friend you know on the site if possible). Spend all of your money challenging them in games. Then deposit an additional $10.

Bang. Your non-withdrawable funds now drop to $0. After 72 hours, your entry fees will be returned to you as real money. And you’ve now changed bonus money into withdrawable cash.

RoyalGames offers 30%-50% deposit bonuses once or twice a month, so you’ll be able to generate a solid $12-$36 per month from this trick without actually having any gaming skills whatsoever. Again, if you have a significant other, you can double this, and $500+ per year in free bonuses become very doable.

Even better: get good at some of these games, and you can win significant money, especially in the lower ranks! YouTube videos will show you how to play games well enough to win at lower rankings. Playing some real games will also get you your 500 jewels (which you need to be able to challenge others). If you play enough, you can also earn the right to play a free game each day, which can also be quite valuable.

Typically when you start winning in a game, your rank will go up. Eventually you will move into a new ranking bracket and be forced to play against harder opponents, until eventually you are no longer profitable in that game. Your ultimate goal is to always play against people that are lower ranked than you. Tournaments allow players in a certain range of ranks (e.g. 2000-3999) to play. Once your rank starts to approach the top of that range (and you can tell by examining all of the rankings of your opponents to see what the highest one is), you’ll want to avoid letting your rank go over that number. Occasionally you will find a tournament where you can profit and still have your rank go down. That, of course, is like owning a money machine. You can and should exploit that type of scenario to the fullest extent possible.

From those two sites alone, you can easily make $600+ per year, even without any special gaming skill, and much more if you get good at some games and find long-term profitable plays. If you like looking for +EV situations on sites like these, other sites that you could consider trying include Worldwinner, Game Colony, and other sites from the list found here.

This post is already quite lengthy, and we haven’t even begun to address the +EV opportunities that exist in other types of gaming sites, such as poker, fantasy sports, and video gaming. We’ll get to those in a future post, but for now, if you know of similar +EV plays on other gaming sites, let us know about it in the comments!

Building a Side Income through… The Lottery?

Conventional wisdom says that lotteries are a “tax for the stupid” — that it is ignorant to play the lottery because in the long-term you are certain to lose more than you win.

Again, conventional wisdom might be true for the masses, but not for us. As with credit cards, this is a spot where we can exploit the mistakes the masses make to our benefit.

Before we dive deeper into this, though, let’s discuss the concept of expected value (EV). Let’s say that you were offered the chance to flip a coin, and if it came up heads, you would win $10. In that scenario, the expected value of each flip is $5. Flip the coin 100 times and you would expect to win $500 (50 wins x $10 each). A profitable situation has a positive expected value (+EV). For example, if you could play the coin flip game for anything less than $5, it would be a +EV game. If the game cost more than $5, it would have a negative expected value (-EV).

When we examine the lottery (and in another post, when we look at various forms of skill gaming), we want to look at everything in terms of EV, and we want to exploit any +EV situations we can find.

One famous example of a +EV lottery game was the Cash Winfall game that ran in Massachusetts from 2004 to 2011. A group of students at MIT won millions of dollars by taking advantage of that +EV opportunity; an older couple from Michigan won millions from the game as well.

Certainly there aren’t any +EV lottery opportunities today, though… right?


In my home state of Michigan, the Michigan Lottery has an online component. You can play instant-win games directly on the site. Here’s an offer they currently have running there:

That offer above is +EV to the tune of $62.50. Put this $200 on a credit card with 2% cash back (or better yet, as part of a bonus churn) and your EV becomes $66.50 or more. Have a significant other who could join as well? Now your collective EV from just this one offer is $125 before any credit card bonuses.

Why is the EV $62.50? When you deposit $200 through this offer, you receive $300. You must play through the $300 one time before withdrawing. Your best bet is to play one-number Keno, which has an 87.5% rate of return. (Fuzzball Keno is the safest option on this site, since you get back half of your bet even on a losing one-number game.) 87.5% of $300 is $262.50. So on average, you will profit $62.50 from this deal.

If you live in Michigan, you’d be crazy not to take this free money. In addition to the welcome bonus, they have a daily spinner where you can win additional prizes, and they often give away free games hoping you’ll be induced to continue playing on your own dime. In all, last year my wife and I profited more than $2,000 from the Michigan Lottery. No luck was involved.

Over the past few months, I have told several dozen of my friends and family members about this opportunity. Just three have actually chosen to take the easy money.

Perhaps I’m just not a very persuasive guy, but I think the bigger issue is that it is hard to break through people’s prior misconceptions. They’ve been taught that the lottery is a sucker’s game, and no amount of data can change their mind. After all, only a select few people took advantage of the Cash Winfall game in Massachusetts despite it running for years.

The goal of this post is two-fold. First, if you happen to live in Michigan, take the free money as described above. If you live in another state with an online lottery, investigate any welcome offers and check for any +EV plays you can find. (Not sure if your state has an online lottery? States with online lotteries are colored green in the map below.)

For people who don’t live in states with an online lottery, keep alert for offline +EV lottery opportunities (many states, for example, post a list of unclaimed prizes for scratch-off tickets; these can become +EV if a disproportionate number of large prizes remain with few tickets yet to be sold).

The second goal is a mindset shift. There are two general lessons to take away from this post as we seek to live The Data-Driven Life:

  1. Challenge “common knowledge” to see if it aligns with actual data. “Lotteries are for losers” is not always true; the same goes for “Credit cards are dangerous.”
  2. Customer acquisition is often a profitable moment that we can exploit. Companies are often willing to give excessive value in exchange for what they hope will be future profit. We can use this to our advantage in a wide variety of situations (anyone up for a free year of cell service?).

If you liked this post, check out this related post about making money through various forms of skill gaming!

Optimal Credit Card Usage

For people not living The Data-Driven Life, credit cards are a ticking time bomb. We’ve all heard the warnings: spending increases when people use credit cards instead of cash, total US credit card debt passed $1 trillion in for the first time in 2018, and 41.2% of American households carry credit card debt from month to month.

One survey even came to the conclusion that for millennials, credit card debt is scarier than death.

Bombarded with articles like these, younger people are becoming increasingly wary of credit cards. One recent study from VISA found that millennials now use debit cards more frequently than credit cards: 28% of their purchases go on debit cards, while 27% go on credit cards. (Personal checks, shockingly, still account for 8% of all transactions for that age group.)

If you can’t understand that credit card purchases cost real money just as when you pay with cash, by all means, switching to debit cards makes sense.

For the rest of us, we can and should allow the bad behavior of the masses to subsidize free income for us.

(This will be a recurring theme on this blog. The masses who throw away their paychecks on the lottery subsidize us being able to get free money from the lottery, for example. We’ll always look for opportunities where the illogical behavior of the masses can subsidize the data-driven behavior of the few. )

So how should we use credit cards profitably?

Part 1: Maximize Your Rewards

Everything you buy should earn you a minimum of 2% cash back. The Citi Double Cash card can be your standard go-to card to make that happen.

Often, however, we can get 5% or more back in certain types of purchases. The Discover It Cash Back card offers 5% cash back in revolving categories. On its own, that’s not terribly impressive or unique. The Chase Freedom card, among others, does the same thing. But at the end of your first year with the Discover It Cash Back card, all of your cash back bonuses are doubled, and you receive that amount as an additional lump sum. This can effectively get you 10% cash back in rotating categories throughout the year, which is excellent.

To get 6% back on groceries, I recommend the Blue Cash Preferred Card from American Express. Finally, to get back 5% on purchases at, I recommend the Amazon Prime Rewards Visa Signature Card.

 Part 2: Bonus Churning

Many credit cards also offer large cash bonuses or other rewards (gift cards, airline miles, etc.) to get you to sign up with them. I recommend taking advantage of at least one to two of those sorts of offers per year.

The first bonus I claimed this year, and the top one I currently recommend, is the deal from Chase Sapphire Preferred. If you spend $4000 in 3 months, you get points worth $500 in cash back. If you use the points on travel, you get an extra 25% bonus, making them worth $625. Add a second user on your credit card and receive another $50 cash back (or $62.50 for travel).

My wife and I signed up for this card well in advance of a trip we already had scheduled for July 2018, and after spending $4000 on this card, we were able to save over $725 in airfare costs ($687.50 from the initial bonus + the regular cash back for the $4000 spent). We effectively got over 18% cash back for purchases we were already going to make over a 3-month period. That was well worth the hour or two of hassle we put into signing up, using the card, and spending the points.

A list of other excellent bonus opportunities can be found here.

If you stop here, you could easily be making $1,000-$2,000 per year in credit card rewards and cash back. The credit card companies will be losing money on you, but we won’t shed a tear for them; the masses will provide them with plenty of profits to more than make up for it.

Step 3: Bolder Moves — Selling Trade Lines, Exploiting 0% Interest Rates

If you’ve got good credit, you can profit by using it to help improve someone else’s credit.

In the opening post of what has become a massive thread on the Money Mustache forum, user arebelspy explains:

[A person with bad credit] might pay $1000 (or whatever–all the numbers in this post will be illustrative) to a credit boosting company, who acts as the middleman bringing together people who have credit cards with a long history and/or high limits, and people who want their scores boosted.  That company then turns around and pays you $125-275 (depending on the card’s age and credit limit). You add the person as an “authorized user” on your credit card you’ve had open, say, 5 years that has a $15,000 limit, and no late payments ever, and you spend a few bucks on the card, so it closes with a balance.

This new authorized user never receives a card, and can’t spend any money on the card (see more details on this below).

A few weeks later, your credit card statement closes, the credit card company reports to the credit agencies that this individual is an authorized user on this card, which now, due to the amount of time the card has been open and the extra available credit, boosts their score.  They go buy the car, and save a bunch of money on interest.

A month later, you remove that person as an authorized user.”

Disclaimer: although this is perfectly legal, it is often against the terms of service for a credit card company, so you can attempt this at your own risk. Even if you (like me) choose not to go down this route, it does open up some questions: If I could profit from selling my credit score, what other data points might I be able to profit from? More on that is coming soon in another post.

Finally, many credit cards have 0% interest offers for the first 12-18 months that you own the card. (A list of these cards can be found here.) An aggressive approach could involve putting your typical purchases on that card, then investing the money you would have used to pay off the card in an interest-bearing account until just before the 0% interest rate expires.

Far from being a ticking time bomb, credit cards are an incredible opportunity to stretch your income by at least $1,000-$2,000 per year. To live a Data-Driven life, you should take advantage of this.

The Math behind Weight Loss and Staying Fit

According to the Center for Disease Control, a whopping 40% of the adult US population is currently obese. That’s not all: an additional 30% of the adult US population is overweight, but not to the point of obesity. In addition to lowering people’s quality of life, obesity causes 21% of all health care costs in the United States, totaling over $190 billion per year.

Let’s take a look at the math behind weight gain.

Before we do, though, I must say that seldom has a simple math problem become so unnecessarily complicated. The weight loss industry was a 66-billion-dollar market last year, so there’s a lot of financial incentive for companies to keep people fat and confused. It doesn’t have to be that complex.

First of all, let’s examine what actually constitutes a healthy weight. First, predict: What do you think a healthy weight is for a 6-foot-tall man? How about a 5’5″ woman?

Here are two helpful calculators for figuring out ideal weight based on height and gender: the first is an ideal weight calculator, and the second is a BMI (Body Mass Index) calculator.

For a 6’0″ man, an ideal weight is approximately 165 pounds, and the healthy weight range is between 147-183 pounds. A weight of 184-220 would be considered overweight, and a weight of 221+ pounds would be considered obese. (Remember, 40% of the population is obese!)

For a 5’5″ woman, an ideal weight is approximately 130 pounds, and the healthy weight range is between 111-150 pounds. A weight of 151-179 would be considered overweight, and a weight of 180+ pounds would be considered obese.

A pound of fat contains approximately 3,500 calories. That means that a 5’5″ woman who weighs 180 pounds (right on the borderline of being obese) and wants to get down to 130 pounds has to get rid of an extra 175,000 calories worth of energy stored on her body.

According to Runner’s World, a 180-pound woman running a 10-minute mile would burn off 136 calories. So our hypothetical 180-pound woman would need to run a ridiculous 1,287 miles to burn off her excess fat and get down to her ideal weight of 130 pounds.

It gets worse. As our hypothetical woman begins to lose weight, her body would become more efficient, and she would begin to burn fewer calories per mile. One mathematician, after conducting experiments on a number of subjects, calculated that losing a pound of fat actually requires burning off not just an extra 3,500 calories, but closer to 7,000 calories.

At that rate, our woman is going to need to run from San Francisco to New York City to get back to her ideal weight.

So what’s the solution? Well, first of all, for our woman described above, a short-term diet isn’t going to work. What’s needed is for her daily caloric intake to match the daily caloric expenditure of a woman at her ideal weight. This calculator is perfect for figuring out what that would be.

In our example, we’ll say the woman in question is 30 years old, and she wants to weigh 130 pounds with a lifestyle of moderate exercise. According to the link above, her expected daily caloric expenditure would be 2,031 calories.

So our hypothetical woman should begin eating 2,000 calories or less each day, exercising moderately if possible. Her body will then slowly begin to find a new equilibrium weight where her caloric expenditure matches her caloric intake, and it should be right around 130 pounds.

Again, to summarize: Each day, you need to eat no more than the number of calories that a person at your ideal weight would burn off in a day.

Once you’ve got your target number of calories to eat daily, what’s the trick for staying at or beneath that number? Obviously a multitude of books have been written about this subject, but I think the simple answer is this: It will be easier to stick to your caloric limit if you don’t feel hungry, and the best way to feel full while eating fewer calories is to eat foods that are less dense in calories.

Caloric density, in my opinion, is the #1 key to losing weight. The chart to the left shows the number of calories found in one pound of some different common foods. (Credit

Your goal should be to eat the foods that have as few calories per pound as possible. Will power is a finite resource, and as such, you can’t plan to just use will power to fight off hunger pangs as a long-term weight loss strategy. Filling up on foods with fewer calories per pound will allow you to lose weight without feeling hungry.

That’s all there is to weight loss and staying fit: Eat like the person you want to become, and consistently eat foods with a low caloric density. I’ll dive deeper into what exactly constitutes a “good” caloric density and what your average caloric density should be in another post.