You are not going to be successful at betting if you do not have a firm grasp of money management. Investing on sports take discipline, and lots of it. I say “investing” because a sound approach, supplemented with good money management skills, virtually takes the gambling out of sports betting.
Sure, you are still placing bets and assuming risk, but with the right tools behind you, year-in and year-out you can make money. Betting on sports is not a 50-yard dash, but a long distance race and the serious sports bettor has to look at it this way. There will be many ups and downs along the way and this is why a proper money management system must be in place before you make your first wager. Today, I hope to give you the knowledge to improve your money management skills.
Some of you might be thinking, “If you can pick a greater percentage of winners than losers, why do you need a money management plan?” The answer is simple. If you can pick more winners than losers, say 55%, but do not have a solid money management plan, you can still easily lose money. Plain and simple.
Most betters agree that a set unit price per play is that way to go. I am not going to go into the Kelly Criterion in this article, because I believe that if a capper has plays that he believes has a greater value than what the oddsmaker posted, then it is up to him to make the decision to rate his plays accordingly. This article is aimed for bettors who pick the right games, yet still lose money.
An Example of Good Money Management
Let’s use the NBA for an example and assume that we lay –110 on all sides and totals. Let us also assume that we win 55% of our wagers. Now, lets take a look at what the ideal return should be.
Say we have 438 bets, including sides and totals for the year. At 55%, that is 241 winners and 197 losers. If we played at a set unit per play, a $5,000 bankroll at 2% per unit would be $100 per bet. This equals 100 X 241 = $24,100 dollars won, minus 110 X 197 = $21,670 (again, assuming -110 juice on all wagers). So we get $24,100 – $21,670 = $2,430. This equates to approximately 24.3 units won, which is quite a nice profit.
An Example of Poor Money Management
Now let us look at a better who starts out using a money management system, but after a great winning streak, decides to vary his bets and increase them.
Say he starts out the season going 62-40 at $120 per play, 62 X 100 = $6,200, minus 40 X 110 = $4,000, winning $2,200. Then this player decides to get greedy and up his bets to 5%, or $250 per play, to capitalize on his “great” handicapping skills. It is extremely unlikely for him to continue to hit 61% of his wagers long term. Let’s say he goes just 15-25 on his next 40 bets. Now, for the season, at 77-65 (54.22%), he is still above the required win percentage to win money (52.38%). However, going 15-25 translates into the following: 15 X 227 = $3,405, minus 25 X 250 = $6,250, for a net of -$2,845 for the season. If he would have kept his original unit price of $100 per play, he would have instead won $1,500 and lost $2,750 (net of -$1,250) on his bad run of 40 wagers, however, for the season he would still be up $950, not down!
This is just one example of why, even if you can pick 55% winners, you still must have your head in the right place regarding money management. If not, a bad streak can wipe you out.
In the “Poor Money Management” example, the better wanted to increase his profits, he got greedy, he was looking for a 50-yard dash, and look what ended up happening. He went broke and fell completely out of the race. He has to play the rest of the season from behind and chances are that this type of better will increase his unit price again to get himself out of a hole.
On paper, it is easy to see and understand, but doing it in the real world is much different. In all of my time spent in this industry, the number one thing I have learned is patience. It is a must. Without it you will crumble. You have got to have the will to sit through a losing streak, understanding that your handicapping is not flawed, that losing streaks happen to everyone. EVERYONE.
The reason I typically recommend around 1% to 2 % unit of your bankroll per wager is so that when losing streaks happen, you will not blow your whole bankroll. You need your unit to be small enough that you can go on an extended losing streak and not be completely wiped out.
I am sure every sports better out there knows one, if not many of these types of people. I believe the causes are greed and impulse control. Take a look again at my first example. The guy who picked his 55% and stayed with a solid money management system the whole way turned profit of $2,430 off of a $5,000 starting bankroll. That is a return of 48.6% on your money. Let me say that again. A return of 48.6% on your money. Stay disciplined and patient and good things will happen! Just like no winning streak lasts for ever, losing streaks don’t either. If you stick to your plan and don’t get greedy or go chasing losses, you can enjoy success at betting on sports.