If you’ve gone house hunting, these thoughts are familiar as you enter another property: Is this the one? Should I keep looking? What if the perfect home is just around the corner?
This is a familiar dilemma for house hunting and other major personal finance decisions.
It also belongs to a class of mathematical problems known as the theory of “optimal stopping,” which is the problem of choosing a time to take a given action.
Fortunately, there’s an answer to maximise your chances of getting the best outcome.
Thirty-seven percent.
This article was written by a Financial Horse Contributor.
The 37% Rule
The 37% Rule defines a simple series of steps for solving this problem. It’s a simple yet powerful tool for better decision-making.
Here’s how it works.
Imagine you’re searching for a new property. You’ve gone through listings and lined up viewings.
Assume listings are so popular you can’t compare options. You can either buy the property...