The gambling honeymooners
A couple are honeymooning in Las Vegas and set aside $500 for gambling in the casino. They spend a great day at the tables but end up losing their $500. They grab a quick dinner before heading back to their hotel suite.
Late at night the groom can’t sleep, and he spots a $5 chip on their hotel room floor. His wife is fast asleep so he decides to try his gambling luck one more time. He heads back down to the casino for one last bet.
He wanders past the roulette wheel and decides to bet his only chip on the date of his wife’s birthday. To his surprise, he wins!
Then he tries the date of his own birthday… and wins again!
So he keeps betting. Thanks to an unbelievable run of luck, he’s soon sitting there with a stack of chips worth $500,000.
A large crowd has gathered behind him to watch every bet. Giving in to the adrenaline surge, he decides to go “chips-in” on one final bet.
“One more bet to win a cool million and I’ll never have to work again,” he mutters to himself, as a pile of chips worth half a million dollars goes on black.
And… he loses.
The crowd sighs and quickly disperses.
The groom is devastated by not walking away with a huge pile of cash. He trudges back up to his room in silence and tries to get some sleep.
The next morning he mentions to his wife that he had gone back down to the tables for one last shot after finding a chip under the chair. She’s still half asleep but asks how he got on.
“Not too bad,” he says.
“I lost $5”.
Of course that story is an urban myth, but it demonstrates how punters under-estimate the value of money they have ‘won’ on the punt and often end up giving it all right back.
There’s a trait known as ‘mental accounting‘ which means that we have a tendency to treat money differently depending on where it has come from. When we win money we are more likely to account for it differently than money we have ‘earned’ by more traditional means. Most people are far more willing to risk (and waste) money we have won gambling because we don’t see it as the same as money we have earned.
For instance we are far more reckless with a big quaddie win than we are with the money Nanna left us. Or to relate it back to the urban myth above, if the groom had started the day with his own $500,000 bankroll there’s next to no chance he’d have risked it all on one big bet.
Successful punters are able to treat money the same no matter where it came from. Punting is their business so they look upon money ‘won’ exactly the same as money ‘earned’. They don’t get blasé when they have just had a big winner. They don’t risk any more with their betting profits than they would do with any other income. It is still their money.
So you really should put some time into thinking about how you are going to treat your winnings and what you plan to do with them. That should help you value that money just as much as you do any other cash you have.