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When it comes to sports betting, proper bankroll management and money management is really simple to explain, but still quite difficult to actually adhere to. There are all kinds of different systems out there for varying one's bet size, but all these systems do is give you false expectations, which can actually harm your chances of being successful. Not only do these false systems affect your cash flow negatively rather than positively, but they also tend to raise the break even percentage that is required of you in order to succeed when betting.
Any time you vary the size of your bet, even by the slightest amount, you are increasing your break even percentage. If you refigure that percentage after every single bet, your break even percentage will continue to change. Some people say that increasing your bet during a winning streak is the wise way to go, or that you should decrease your bet when you are on a losing streak. The key concept here is that these streaks come and go. You may have been on a winning streak yesterday but that does not mean that your streak will continue today. If winning and losing streaks were guaranteed, you would know exactly how to bet today simply based on yesterday's performance - But that's not how sports betting works, not in the least!
The biggest problem that relates to bet size is not even the streaks, but rather it is that break even percentage that you have to work with. If you have a 56
percent average for each bet, for example, over the period of 200 games or so you will probably win less than 50 percent about 17 percent of the time, and you will win more than 60 percent about 17 percent of the time. Winning 100 games and losing 100 games with a 5 percent unit will have you losing half of your bankroll. You will lower your bet, and you will never be able to break even. Instead, it is recommended that you never play more than 2 percent of your bankroll. Anything that is over that 2 percent is simply risky on an unacceptable level, even for people who bet recreationally.
The reality here is that each person may be trying to accomplish a different goal. If your goal is simply to be able to afford entertainment without going
broke in the process, then your goal is going to be completely different from someone who is looking to make a living. If you are betting $100 in every game
of Monday night football simply to get enjoyment out of the game, then it may only cost you about $5 dollars a week, and you can possibly go 50 - 50. There is absolutely nothing wrong with this type of bet, or this type of game, as it is cheaper than seeing a movie once a week, and can be considered an
entertainment expense.
If you want to take sports betting seriously, you are going to have to treat it like you would treat any other business opportunity or practice. In sports betting, your cash is your inventory. If you run out of inventory, or cash, you are put out of business. Have you ever been told that you should never bet with your rent money? This is a noteworthy consideration to remember.
If you are betting for a living, you also should not be using your gambling bankroll in order to pay your rent.
This is what is amazing about sports betting: There are some pretty incredible returns on investment (ROI) that you can earn, and there really is no magic
involved in the process. The return on investment that you can earn in sports betting is a function of the winning percentage that you earn when coupled with the amount that you are investing. The amount that you invest is essentially a function of how many games or investments are made, and how much money is being bet on each individual game. It is the same as with any business that you could be running: How many products did you sell, and how much money did you gross for each product that you sold?
So let us say that you play between 1,000 and 1,200 games per year, but let us focus on 1,000 for now. Now say that you only bet 1% of your bankroll on every bet that you make. What this means is that you will be betting 1 percent of your money 1,000 times over - Or 1,000 percent of your bankroll. In other words, you will be betting the same money ten times over in a year, which is what makes such outstanding returns on your investment possible.
Now for example if you should happen to win 56 percent of all of your plays, you will get a ROI or Return on Investment of nearly 100% of your bets. You can win 560 bets, and lose 440 bets, and pay a broker fee to the sports book at around 44 bets, meaning that you have won a total of 76 units. 76 units multiplied by the 1 percent of your bankroll that you have been betting, and you have 76%. This means that you will win $7.60 dollars for every $100 dollars that you bet.
There are a lot of people out there who think they can make a living in sports betting.
It may be a completely attainable goal, but only if you have the kind of bankroll that can support such a habit without your betting getting out of hand. If you bet $100 per game, and play twenty games every week, you will only make about $152 at $7.60 a game. If you bet $200 a game, you can only expect
about $308 dollars a week.
This is a difficult wage to live on. The minimum that you could possibly live comfortably on is a bet of $500, but even this is only $760 dollars a week,
leaving absolutely no room for the possibility of a bad streak. If you bet $500 at 1 percent of your bankroll, you need to have $50,000 in your bankroll. Just like any business, you should continue to invest some of your profits as a means of "growing the business".
As soon as you are able to draw from the business, you should put yourself on a salary basis. This way, you can figure out exactly what to expect in terms of an income and you will not have to worry about short term misfires.
You just need to know the number of bets that you will place, the amount of money that you will place in every bet, and the winning percentage. With these
figures you will be able to effectively estimate how much income you will generate in a single year of consistent betting.
The more you play, the more easily you will be able to determine how many plays you will make every year, and what your average bet size is based on your bankroll. After 1,000 plays in a single year, you will also be able to determine the standard deviation for a win percentage. Say your standard deviation is 2 - You will know at this point that you can win between 55 percent and 57 percent of the time. While it may not be exciting when you know exactly how and when you'll win, boring business has its merits. For example, now your bankroll management is practically automated, your betting structure is well run, and you know exactly what to expect with very little room for unhappy little surprises.
As a final note worth mentioning regarding the size of the bets that you place, it may be worthwhile to consider a plateau system to guide how much money
leaves your bankroll for betting purposes every day or week. If you bet 1 percent of your bankroll and then continue to flat bet until your bankroll grows
by a significant amount (such as 25 percent for example), then you can recalculate your 1 percent bet.
Example: If you start with $10,000 dollars, and you bet 1 percent or $100 a game until your $10,000 becomes $12,500, then you can recalculate your 1 percent because your bankroll has grown by 25 percent. At this point 1 percent of your bankroll is $125 dollars rather than $100 dollars. Now you would
continue to bet $125 dollars until your bankroll reached an additional 25 percent, which is $15,625. What this does is keeps your risk / reward ratio from
climbing too high.
Something else to remember is that you should not lower your bet. If you vary your bet, you change your break even percentage. When you are only dealing with 1 percent units, you can ride through most losing streaks without having to lower your bet any. If you lose ten games at $200 dollars, and you lower your bet to $180 dollars to make up for the loss, you have to win more than 12 games in order to get back to even, rather than 10. Why go to this extra effort? As your bankroll goes up, you can earn back the lost money without having to play more games than usual, or having to negatively impact the amount of your bet.
Bankroll management is much easier in theory than in practice - But it is important that you implement positive and well thought out bankroll management strategies regardless of whether you are partaking in sports betting as a hobby or as a career. Treat sports betting like a business rather than a hobby, and you will be more successful than if you bet without thinking.
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