This is another in a series of Sports Betting 101 stories.
Believe it or not, bankroll management can be just as important as picking winners. The goal is to map out a disciplined, consistent strategy that allows you to maximize your profits and minimize your losses, providing long-term sustainability. Think of bankroll management as the way to invest in sports, not just bet on them.
Before placing a single wager, bettors must ask themselves this fundamental question: how much can I afford to lose?
Everyone's answer is different. For some people, this might be $100. For others, it might be $1000, $10,000 or $100,000 or more. Regardless of your income level, you first have to decide on a number you are comfortable risking. Consider is your disposable income. If you lost it all, would it drastically change your life? Would it negatively impact you financially to the point of missing car, rent or mortgage payments? Would it bankrupt your life savings? Would it force you to take out a loan? Or cancel a vacation or cut back on groceries? If the answer to any of these questions is yes, then that number is too high.
When you first enter sports betting, you need to be clear eyed. This means hoping for the best, but expecting the worst. Only bet what you can afford to lose. You never want to put yourself in a situation where you go broke and have to take out a loan because you've dug yourself a massive hole betting on sports.
Whatever number you end up deciding on, this is called your bankroll. It is the total amount of money that you have set aside specifically for betting on sports.
One of the most pivotal factors of bankroll management is making sure you are properly funded at the beginning. The more money you start with, the stronger position you put yourself in when it comes to turning a profit over the long haul. There is no way around it: When you first start betting on sports, you'll make mistakes. You will likely lose much more often than you win. If your starting bankroll is too small, you won't be able to weather the initial storm and survive the beginner's learning curve.
The first step is setting a hard number for your starting bankroll. This will allow you to map out your bankroll management strategy much more easily. It also gives you a good benchmark to track your performance and chart your progress, providing a daily report on how you're doing as a bettor. A good starting bankroll is $1,000. If you can start with $2,000, $5,000 or $10,000 that's even better. The key is beginning with an even, round number that is large enough to keep you afloat through the rough, early days when you're learning how to bet.
More importantly, you want to make sure that you are approaching sports betting with a clear mind and level head. If you start with a low number, say $100 or less, and you are worried about losing money and constantly stressed out, you will lose focus on the task at hand, becoming distracted and more prone to making mistakes. Your judgment will be clouded and your decision making won't be sound. You will enter bets with a defeated mentality of trying not to lose more money instead of a winner's mentality of trying to make money.
The most common mistake a new bettor can make is being careless and reckless with his or her bankroll. This means betting different amounts on different games based on how confident you are in a team or a bet. Typically, if a new bettor loves a game, he will bet a large amount on it. If he likes a game but isn't as a confident, he'll bet less. In betting circles, if you like a game but aren't completely sold on it, that is considered a "lean."
New bettors also bet based on emotion and recent performance, which is a slippery slope and fast track to failure. When a new bettor is doing well and riding a hot streak, he feels invincible like everything he touch turns to gold and is bound to win. As a result of this overconfidence, he will start to get greedy and risk more and more with each bet.
On the flip side, if a new bettor is mired in a cold stretch and feels like he can't catch a break, also known as being "snakebit," he will start to risk more and more each game with the hopes of winning it all back in one fell swoop. This is referred to as a chasing and should be avoided at all costs. It is the quickest way to go bankrupt. When new bettors are losing, they can also get scared and change their approach. This means betting far less on games or laying off entirely. This can also be problematic as it causes bettors to forfeit value by forgoing a smart bet that could have won, or winning far less on a bet strictly out of fear or losing more. A common mantra for all bettors is this: Scared money don't make no money.
In both scenarios outlined above, bettors should resist these perceived short cuts and easy ways out. These strategies, or lack thereof, are dangerous, unsustainable and can quickly lead to losing it all.
Instead, bettors should adhere to a consistent, disciplined approach. This allows bettors to maximize their winning streaks but also weather the inevitable cold stretches. Betting on sports is a roller coaster. It can be very volatile and unpredictable with massive ups and downs in short periods of time. This is referred to as variance.
We all want to get rich quick. But that just isn't realistic. The ultimate goal is to steadily build you bankroll over time, not become a millionaire overnight. Remember: Sports betting is a marathon, not a sprint.