It’s not profit until it’s in your pocket

Many punters under-estimate the value of money they have ‘won’ on the punt and end up giving it all right back. An urban myth illustrates this perfectly… A couple are honeymooning in Las Vegas and decide to set aside $500 to gamble in the casino. They spend a great day at the tables but end up losing their $500 so they head back to their hotel suite. Late at night the groom can’t sleep and while tossing and turning he spots a $5 chip on their hotel room floor. His wife is fast asleep so he decides to try his luck one more time and head back down to the casino for one last bet. He wanders past the roulette wheel and decides to bet his last $5 on the date of his wife’s birthday. To his surprise he wins! Then he tries his birthday and wins again! So he bets his mum’s birthday and wins yet again! He bets on…. I think you get the picture. He has the most unbelievable run of luck and ends up sitting there with $500,000 in chips and a large crowd watching every bet. Giving in to the adrenalin surge and the pressure of the crowd’s urgings he agrees to one more bet. He places $500,000 on black. “One more bet to win a cool million and I’ll never have to work again,” he thinks. BUT HE LOSES The crowd goes away even quicker than they had gathered and he trudges back up to his room in silence. Early the next morning he told his wife that he had gone back down to the tables after finding a chip under the chair. She is still half asleep but asks how he got on. “Not too bad,” he says, “I lost $5”. You see, most punters are very liberal with the cold hard truth of their betting success. Telling the wife you ‘broke even’ invariably means you actually finished the day behind. There is also a trait known as ‘mental accounting’ which means that we have a tendency to treat money differently depending on where it has come from. The problem is that often 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 because we don’t see it as the same as money we earn. 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 man had started the day with his own $500,000 it is highly unlikely he would have risked so much on just one bet. However the most 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. If you can develop this betting mindset, then you are well on your way to becoming a successful bettor. 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.