As part of our 101 series we want to introduce you to the art of correctly managing your bankroll.
Most recreational bettors have little to no experience managing and organizing their bankroll correctly. Some may not have a bankroll and simply deposit $20 for the next Bo-Sox v. Yankees game. However it is important to not only track all of your bets like we do here but also manage your money appropriately, otherwise how can you know if your actually a: making money or b: any good.
Have a predetermined bankroll and then betting to align with your bankroll is very important for long term success.
So how much should my bankroll be?
Your bankroll should only be as much as you can safely and willing to lose. We use the principle that once the money is put into the accounts its gone. This helps set realistic expectations that you may never actually get your money back.
The average bettor actually wins about 50-51% of all their bets. However even winning 51% of your bets, winning more than losing you will still come out as a loser because of the house hold as most 50/50 bets are aligned a base of -110. For most bettors to come out ahead you need to reasonable win on average over the lifetime of all your wagers a little over 53% in order to make a profit regardless of how small it is. This is your break even percentage. Its important to understand this break even percentage so you can reasonably cap your bankroll appropriately.
To ensure we keep our gambling funds separate from our living expense funds, personally we actually have a separate bank account from which we allow ourselves to use for gambling wagers.
Is this a little extremely?
Probably, but this way we can always ensure we are not betting this months rent check. It’s all a matter of personal preference. For our conversation today we are going to assume our bankroll is $1,000. As most recreational gamblers on a typical trip to Vegas bring on average around $1,000 in cash to spend at the casino.
How much should I bet?
How much you should bet is the problem most gamblers try to solve. How much or which bets and how often? These decision point can be some of the hardest part of gambling especially when your on a losing streak.
Our personal recommendation for long term wagering is to utilize the 1% method. While lot luxurious or flashy it is consistent and reasonable plus it allows you to stretch your bankroll as far and as safely as possible.
So what is the 1% method?
The 1% method is pretty simply. We flat bet every wager for an entire season to be no more than 1% of our total bankroll. So for our $1,000 example every bet will be no more than $10. So on a typical Saturday you may only bet $50 on your 5 best bets of the day.
This is by no means flashy or the cool way to bet. However in our opinion is the the method that consistently allows us to bet day in and day out without minimal impact to our bankroll and helps us make money long term. While its not a lot of money your also not a professional gambler. Most recreational gamblers want to be able to say they had a winning ticket on the long shot to win even if its only $10. A win is a win regardless.
When do I increase by bet size?
We have a personal stance of not increasing or decreasing our wagered amount regardless of bankroll size from one season to the next. This ensures additional consistency. For conversation we will say you go on a winning streak and have doubled your bankroll over the last month to $2,000. Based on the 1% rule you would change your wager size to $20. However, you are also on a heater, and if your not tracking your bets appropriately you may not be aware and when you increase your bet size to $20 and come of your heater and be back to $1,000 twice as fast as it took you to get there.
We are of the opinion and stance that we adjust our bankroll after the conclusion of each season adjusting up or down based on the outcomes of the previous season in order to preserve or withdraw any earnings accrued over the season.
How should i split up my bankroll?
This is also another important subject in bankroll management as its about leveraging risk. When betting from a long term approach its important to understand your risk tolerance. We have Bet-MLB.com have a very low risk tolerance in that while we do play a few wagers on what we call ‘Lottery Tickets’ the major of our bankroll is allocated to standard daily wagering. We use the 90/10 approach for lottery ticket wagers. For our $1,000 example we reserve $100 for these types of wagers.
Most Lottery Ticket type wagers are usually season long bets such as World Series, Division Title, or Player Prop Bets like All-Star selections. We do not want to over leverage our risk for these wagers due to the percentage possibility they will actually happen. Another key aspect is since they are season long you are tying up a portion of your bankroll for a longer period of time which may better be utilized else where in your wagering portfolio.
The 90% is allocated towards our daily best bet positions which for Bet-MLB.com are First 5 wagers.