Money Management and the Sports Book
I know a little about money management, as I’ve been in the investment business for many years. I’ve been a Principal, a Registered Advisor and a top producer in the financial services field; and there’s an element of stocks and bonds that can be related to sports gaming, if you analyze deeply enough. Clearly, one of the most important components to investing, or sports gaming, and wagering, is the issue with money management. Whether it’s Black Jack or Poker, picking a football team to win, or mutual funds and stocks and bonds, it’s fairly common sense that a sound, disciplined approach, need be in place if you’re going to be successful. (When you’ve got stress going on in the real world, I’d suggest not going to the Sport’s Book at this time. You really need to be picking winners and managing money with a clear mind. Trouble in the real world is not the time to be making money decisions).
Keep in mind, while I can help a client figure out a portfolio, I also know how it feels to get that ‘juice’ before a big game, with dollars riding at the sports book. But let me remind you that the winners of this skill and game are the players that don’t over-react, nor become emotional, or do the most common mistake a maverick gambler can do: “chase” the bet”. This skill is really better served for the even keel, and, rational player, who might for example, step back, and assess, stick to a solid game-plan, and not rush their next decision, often out of dismay, even anger. It may indeed be very much exciting, or a thrill, to “chase” down a Sunday evening, to “get back to even”, but lets face it; this is the stuff that can get you “killed”. No analysis really needed with this fine fault, but to “chase down” anything related to money decisions, well, usually turns out very, very bad. You should never do that when you’re dealing with your financial portfolio, so why apply that to a decision involving anything else that involves money, like sports gaming?
A sports player actually breaks even in sports like football, at 52.4 percent, not the 55 that many gamers might think. That would be calculated at 11-10 odds. How’s that? Simple. If you have 11 games right, 10 wrong, then that’s 11 games divided by the total of 21, with the result being 52.4. Obviously, anything better than that will make you a profit. (Many gamers assume 55 winning picks is the key, as 55 would you get you 10 more winners than losers over 100 games wagered. But remember, the house cut, or (juice), only goes to bets that lose. So, for illustration purposes, if you tried to win 100 dollars a game over 100 games played, you’d have to place 110 dollars per bet(10 percent, or juice to the house, is 10 dollars per bet), on every game, and if you hit 55 games correctly, you’d lose 45, for a net 10 game advantage. The 45 losses would result in an extra $450 dollars having to be taken away from the net 10 games profit to cover the house (losses times 10 percent to the house), but you’d actually still have $550 in your pocket as net profit.) My point here, is that obviously, this is better than a break-even figure. You don’t necessarily have to be that good to win in sports gaming.
So, how can this help you in your own personal money management with sports gaming? Sports gaming can still be a lot tougher than you might think. To have a successful season, again you’ll have to hit better than 52.4 percent, but the average gamer, according to different sources, hits somewhere between 45-48 percent. This is worse than simply by chance, or flipping coin when trying to figure out winners? If your betting style is all over the place, and you’re “chasing” a dwindling success pattern, then this is simply going to lead you to disaster. So, your best chance of success is to really stick to a sound disciplined money-management system, calculate your risk on a select few games per session, and find enough information from sources like EZ Sports Winners, to help advise you on those decisions. You’ll increase your chance of success many times over. If you end up trying to do your own analysis, and you find a zillion games you’d like to be involved in, well, this is a red-flag, and you’ll do yourself a big favor the next time you go to the sports book, take a big step back, and gather yourself. Too many games or contests considered can get you hurt quickly in this business!
You can limit a disaster by creating a sound investment and money-management plan that begins with arriving at a calculated amount of what you, or any investor, would like to risk for his entire investment, and for our purpose for the sports-player here, over the course of a year or season. Break that down to a per-week basis, then per-game, you can then arrive at an approximate amount to play on any given contest. A great way to do this is to figure the largest amount of money you’d play on any one game, then wager accordingly. A great way to do that is to figure out the total bank-roll you’d like to limit yourself to for the entire season, and multiply this amount by 2%. This number gives you a decent top-game-play estimate. If your total bankroll is going to be $50,000 for example, then in this case, you’re looking at a $1,000 ($50,000 time 2%, or .02). For further strategy, a sports player could decide on the strength of each play, and employ a rating system, such as the one offered by EZ Sports Winners, to decide an amount to wager on any given play. (EZSW employs a 1-6 game rating, with 6 being the best. We use a 5-dime system on each suggested wager, with every 5 dimes representing 5 percent of your top-game play. Each rating number is worth 5 dimes. So, in this instance, with $1,000 being your top play, a game with a rating of one, then this 5-dime play would be worth a $50 dollar wager). For further explanation, visit our EZSW system page: http://www.ezsportswinners.com/ezsw_system.htm. This plan will help create a sound money-management strategy that will keep you out of trouble! When you do in fact win, a great way to apply this to an increased wager is to take half your winnings and put them away in reserve, using the other half spread out on an average per-game basis, divided up by how many additional week-ends you decide you’d want to play. For example, lets say you end up the week-end with a $10,000 dollar profit. And you have 14 weeks left in the NFL season. You’d put $5000 away in reserve, and the other $5000 could be added to a week-end basis, averaged out over 14 weeks. That’s roughly $350 dollars a weekend, maybe $50 to $100 dollars a game over the course of the rest of the season. This will help manage your decisions when are you winning, rather than “doubling-up” on any single play, or losing your winnings on any one poor decision. While this doesn’t seem exciting, this discipline will help ensure your best chance of success!
With that said, how can we truly protect against the downside? Well, let’s face it, there’s a risk no matter what kind investment, and sports-gaming is no different. We can however, put stop-losses in place, to protect a major landslide. Remember, any investment, to make a profit, engages a certain amount of risk. Any significant return on your money has everything to do with the amount of risk you want to take. If you want absolutely no risk, forget sports gambling. Put it in the bank. In fact, don’t even touch a mutual fund. Put it in a savings account at the bank, quite seriously. Remember too though, and for our illustration purpose, you in fact get little return in exchange for this low risk, and your ‘real’ return is even less. Take out the taxes on your low guaranteed rate, as well as the amount of inflation, and your dollar can be in fact losing value over time in various instances. And of course, your time frame is very important on figuring your risk tolerance. Many people of course need the stability of their money, and this would of course make a lot of sense for a retired person, or for people with a short-term situation, such as monthly budget dollars. The “return” isn’t your goal here, as stability is your main concern. Obviously, sport-gaming isn’t the channel for these kinds of dollars.
But at the other end of the spectrum of course, we have the sports investment, or the sport bet. It’s at the most extreme in terms of risk and reward, and you’re going to have to understand this, if your goal is to try and win, and make rational decisions, rather than just enjoy simple recreation (although there’s nothing wrong with this of course, if that’s your goal). But, It’s not for the feint of heart. It’s a rapid result, with the only money used in this recreation being you luxury money, or the money you could easily afford to lose. This is a very serious note I might add. All the more reason to have a sound plan. I implore you to have a sound gaming strategy, a solid money-management system, and a discipline, to stick to your plan rather than rush judgment, to help keep you from making irrational and emotional decisions. This will ultimately serve you for the most optimum chance of success.
Bottom line, though, a more practical way of establishing your working bankroll each season is to simply ask yourself how much you can afford to lose in a worst case scenario and use that amount as your working bankroll. Maybe this amount increases as you put some winnings away, which is very important, but this would of course help you stop a total disaster in any given session.
Good luck!