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Step 4 - Money Management
The importance of Money Management
Money management is an important subject all gamblers should be well aware of as it is one of the most important aspects of betting. Gamblers who are successful over the long term will have achieved that success through practicing solid money management. Infact its fair to say that the real difference between winning and losing sports gamblers isn’t always about picking winners instead of losers, its understanding and applying money management.
Many people fall under the trap of believing that varying the size of their bets will help then win more in the long run which of course is false. For example, consider the following scenario. There are three football matches you are interested in betting on and the first match your very confident of who will win, but the other two your not as confident. You stake $100 on Match 1 at odds of $2.00 and then $40 each on both Match 2 and 3 which are also at odds of $2.00. Now imagine that your first bet lost, but your two smaller bets won, meaning you won 2 of your 3 bets. You would of made a profit of $80 from your two wins, but your loss of $100 in Match 1 would mean you would of made a loss of $20 overall.
Now consider that instead of staking your money unevenly as above, that you instead distributed your stakes evenly over all three events. You outlaid $180 in total so that would be a stake of $60 on each event. Using better money management such as this would of meant you would of made a profit of $60 overall.
The above example shows how powerful money management can be. It showed that by distributing your stakes evenly, you ensured that your chance of finishing in profit increased and chance of a loss decreased. However it also raises the question of how much should you stake on each bet?
A common method of money management used by many punters is staking a percentage of their bankroll on each event. There is no magic number, but usually anywhere between 3-6% is common. If your betting with a smaller bankroll, this number may increase up to 10%. For example if you have a bankroll of $1000 then a good practice would be to wager a maximum of $50 an any single event. However with a bankroll of $250 you may consider yourself as a smaller punter and may wish to increase your betting stake to 10% of your bankroll, meaning you’d stake $25 on any single event.
This is a pretty standard form of money management and is an excellent step on beginning in the right direction. By staking a set amount on each bet you will ensure you have more chance on staying in profit and not blowing your money. This is only just the beginning though, there are many other types of different methods of money management in sports betting such as using odds comparison tools, finding value bets, using different bet types, setting stop-losses, etc. You can find more information on these in following chapters, but it’s a good idea to find what suits you best and to stick by it.
