How to Make a 20+ Percent Return When Losing Weight: HealthyWage

How to Make a 20+ Percent Return When Losing Weight: HealthyWage

Want to make hundreds and up to $10,000 for losing weight? Healthywage allows you to bet on your own weight loss. #healthywage #financialindependence #makemoney #savemoney #weightloss

Every year as January rolls around, we hear the same resolutions over and over. Most of them are for losing weight. 95 percent of people fail to complete their new years resolutions. I’m sure you’ve been through it as you start going to the gym in January, and before long you’ve stopped and forgotten all about your goal. It’s only week 4 of the new year. How are you doing? Well, I recently found a company that is trying to change the fact that no one meets their weight loss resolutions. Introducing, Healthywage.

How it Works

Healthywage will PAY you to lose weight in the form of a bet. You set the amount of pounds you think you can lose in a specified amount of time, 6-18 months, and you pay a fixed amount each month until the end of your bet. At the end, if you have lost your weight, you get all your money back plus a large return. If you haven’t lost the amount you promised, you lose all the money you put in.

I checked out the site and entered my numbers in their bet calculator to calculate my bet. I’ve been trying to lose 20 pounds for 6+ years. In fact, it’s been in every single one of my new years resolutions. Oops? I’m pretty sure I can do it in 6 months if there’s a crazy incentive. That’s only about 3 pounds a month, or .75 pound per week. I put down $500 a month because $500 x 6 months = $3,000, and that’s very pretty painful amount of money for me to lose.

First page of the bet page

On the second page, you’ll see what the payout is. For me it was 11 percent of my original bet. Since my bet is 6 months long, a 22 percent annual yield is amazing for something that is dependent on only me. You work out and diet, and you either win the bet or not. Everything is on you. In a way, if you can achieve it, it’s a guaranteed payout. Low risk, crazy high reward, best Sharpe Ratio ever.

2nd page of HealthyWage

Here are the parameters of the bets you can make:

  • Each Bet is 6-18 months long
  • Bets are $5-$995 each month
  • Choose to lose 15-200 pounds, or 10 percent minimum of your current body weight
  • Get paid the amount you bet and then a bonus if you win the bet
  • You’ll need to film yourself getting weighed at the beginning and end
  • You can win your bet up to 2 weeks earlier than the end of the bet. If you lose all your weight anytime between 2 weeks prior to the end date all the way to the end date, Healthywage will pay you out earlier.
  • Your bet is paid out in Paypal or by check, your choice.

3 Incentives to Lose Weight

This being a financial blog, I couldn’t pass up such a high return for just losing weight. It’s something you should do if you need to, simple to get healthier. I’m getting paid for something I should’ve done years ago.

You now have 3 incentives for losing weight.

  • 1). Your future health – being healthier allows for cheaper medical costs on average and looking better just makes you feel better
  • 2). You get a high return for achieving your weight loss – Where else are you going to get a 20+ percent return? If you work hard by dieting and going to the gym, then you can do this. It’s all in your hands. You do the work, you get paid.
  • 3). Loss aversion – The human mind is extremely loss averse, so when you are faced with losing the principle on your initial bet, you should kick your butt into high gear and get to the gym.

How much should you bet? Figure out an amount that will hurt you to lose and then decide on a monthly number you can afford. Ie, if you are putting $500 in a taxable brokerage and HealthyWage works on Monthly bets, it will be pretty painful for you to lose between $3,000 and $9,000 as bets last 6-18 months. Continue to get your 401k match and be on track to max out your 401k and IRA, but consider putting the money you would’ve put in a taxable account into this bet.

128 pounds in 9 months. She won $1,323.

So, where does this company get the money to pay out bets?

I doubt everyone is winning their bet. If people are putting in too little in their bet, it might not be as big an incentive to actually lose the weight. For example, if you put in $10 a month for 6 months and get lazy, then losing $60 is not a big deal. If you put in $500 a month for 6 months, you would work your ass off to make sure you didn’t lose $3,000. Researchers have done a lot of research and have found out that fear of losing money is much greater than the excitement of making it for most people.

If people are overestimating the time they need, they’ll lose the bet. Researchers say you shouldn’t lose more than 1-2 pounds per week. To lose one pound, you need to burn 3,500 calories. Losing 2 pounds a week means eating 500 calories under your recommended daily calories and going to the gym and burning 500 calories, which is about an hour’s worth of working out for me. Don’t underestimate how much time you need to actually lose the weight. Give yourself a few months of buffer just in case. Life gets busy and you want to make sure you win.

In my case, I’m offered a 11 percent return over 6 months. This shows that 1 in 9 people need to fail bets that are similar to mine in order for them to break even. 100/11 = ~9 people. What percentage of people who are similar to me actually win these bets? I don’t know, but I would’ve assumed it a much higher failure rate than 9 percent. After all, I’ve probably said I was going to lose 20 pounds every year for the past 6 years. NPR actually asked the company this question, and the founder said that only 30-40 percent of people win their bet.

HuffPo did a similar article when they just started out in 2011. The company mentions that insurers and data scientists buy up the results. I can see an insurer wanting to know how much money they would have to offer you, or bet you, to make you lose weight. A corporation has incentive to put a lump sum of money in and have employees compete in teams to lose weight, as it would bring down the cost of insurance for them. If an insurer offered a weight loss rebate for people to lose weight, it would increase profits if they got the numbers right. So the data is valuable.

How many people do you know who paid for Weight Watchers, a personal trainer, or some other kind of weight loss program? Did they make it? Odds are slim. I’m sure Healthywage makes money because a lot of people just don’t do the work, even with the increased incentive. There is a probably an actuary behind the scenes of Healthywage, who calculates the odds of weight loss given parameters just like actuaries at an insurance company calculate life expectancy and medical costs for someone.

The Algorithm

I’m always interested in understanding the algorithm behind things and so decided to test the parameters for fun. They also list out winners on this page, so it was helpful for comparing data points, unless the algorithm changes between data points.

Weight: Obviously, the more weight you were trying to lose, the higher your yield on payout.

Time: The more time you take to lose it, the lower your yield is on payout.

Dollar Amount: The higher the amount you bet, the less your yield. I’m assuming the data scientists realized how critical loss aversion was.

I found it odd that the algorithm didn’t ask your gender, starting weight, ethnicity, zip code, etc. as that data would probably be invaluable to insurers.

So, what’s stopping you? Make a bet on yourself and earn hundreds to thousands of dollars.

You really can do it, you just need a little incentive to do so. In fact, why isn’t there a company that does this with other good habits? Ie, reading, cooking at home instead of eating out, saving money etc.

It’s January, help yourself financially and physically by losing weight. Stop making those weight loss resolutions year after year and failing because you didn’t have the right incentives. Because when a lot of money is on the line, your ass will get up and get it done. Check out HealthyWage and play with their bet calculator. Stop putting off losing weight and let this light a fire underneath you. This will be the year I finally lose those 20 pounds and the year you finally achieve your weight loss goals.

What do you guys think? Have you used them before? How are you going to meet your goals this year?

4 thoughts on “How to Make a 20+ Percent Return When Losing Weight: HealthyWage

  1. To hell with the bragging rights for winning your corporate weight loss contests, this is a great motivator for getting healthy! Who else would you want to bet on besides yourself?

    I enjoyed your breakdown of the data behind the service, very insightful.

    Thanks for sharing!

    1. It is! The threat of losing the thousands of dollars you used to make that bet will hang over your head. Also, you’ll be scared to tell your wife/hubbie if you lose :0.

      Sadly they banned contests at work after there was a bet made if someone could run a marathon after being crazy hungover one morning. We watched him circle around central park for his 26 miles, with him stopping 3x to throw up. Where else will I get that kind of entertainment now?

  2. It’s an interesting concept – I might try it out. It would be fun to compete with my wife, unfortunately she’s ineligible because she’s pregnant.

    1. Give it a try! It’s a pretty cool concept, taking loss aversion to the next level. Your wife can join in after:). How far along is she? Boy or girl?

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