Money Management Can Make or Break You

In a previous post, I provided some basic information about the first part of all gambling systems…bet selection. Today’s subject is about the second and possibly more important component how to make your bets. This is called money management.

One advantage you have over the casino is that you can vary your bets depending on how your game is going at the moment.

Money management can save your bacon or it can fry it crispy brown to the point it cannot be eaten. The equivalent in gambling is that poor money management can cause total loss of your gambling bankroll if you do not understand sound principles.

Let’s start with the most common and possible the earliest of all money management ideas…the increase above your last losing bet.

For example, if you bet $10 and lose, your next bet will be $20. If that $20 is lost, the third bet will be $40…rinse and repeat, etc.

On paper, this approach should never lose long term because you only need ONE win to recoup ALL previous losses and end up one $10 bet ahead.

Let’s play devil’s advocate and say you have to go 8 steps in order to win your first bet. This can and does happen regularly. Here is the question, how much will your 8th wager be starting at just $10?

The answer is an astonishing $1,280 to win just $10! But that is only half the bad news. On your way to winning that 8th bet, you would have invested an additional $ 1,270! SO, you would need to risk a total of $2,550 to again, win just $10.

Therefore, this is the worst money management you could ever use but I would make a very large wager that every gambler has used this same exact approach at some point, usually at the beginning of their gambling career.

One hallmark of a good system, like mine, is that the largest bet needed to win is not above 2 or 3 units and the number of units risked per shoe is in the 10-20 range maximum.

Much more detail about good money management can be found on the FAQ page of this website.

To Larger Unit Chips,

Dr. Tom