The Betting Bank - 13th May 2013
The Betting Bank - 13th May 2013
The betting bank is the financial hub of your racing business. It’s the repository for all your funds associated with racing. From the betting bank, monies get paid out by way of investments on selections. Monies are also paid into the betting bank from winning selections. Outlined below is one way, a simple way, to manage your betting Bank.
Basic rules:
- The betting bank must be separate from all other finances.
- Run an up to date profit and loss spreadsheet. The one used for the Charity Challenges on our website at Results Spreadsheet is the one we use. Feel free to copy if you wish.
- Invest 2% of the betting bank on each race. By investing 2% of the betting bank means you have to lose fifty consecutive races, to lose your betting bank. If that ever happens - find another gig.
- When the betting bank doubles, take half the profit and pay yourself.
- Add the other half of the profit to your betting bank and commence to bet 2% of that. By adopting this approach, the betting bank builds, whilst paying you.
In reality the actual investment per race will differ slightly because we take fix prices. Hence, we may outlay from 1.5% - 2.5% of the betting bank per race to take out a fixed amount.
Let's look at an example based on taking two horses per race at fixed prices:
- Betting bank of $1,000.00. 2% of $1,000.00 is $20.00. Investments commence at $20.00 invested per race, or near enough for the win on each selection. Sometimes it will be less than $20.00, sometimes more. Although, it would never be more than $25.00 per race with a betting bank of $1,000.00.
- When the betting bank has doubled to $2,000.00, we have made a profit of $1,000.00. The Return on Investment (ROI) is 100%. Remove half the profit, $500.00 and pay yourself for being a good investor. The other half of the profit, the other $500.00, is added to the betting bank.
- The betting bank is now $1500.00. Repeat what you did the first time. Commence to invest at 2% of $1,500.00 per race, which is $30.00 per race.
- Continue investing at $30.00 per race until the betting bank doubles from $1500.00 to $3,000.00. When it does, do it all again. The betting bank has now made a profit of $1,500.00. One half of the profit of $1,500.00 is $750.00. Pay yourself $750.00 and pat yourself on the back for being a good investor. The other half of the profit, $750.00, add to the betting bank.
- The betting bank is now $2,250.00. Repeat the cycle by investing 2% of the betting bank which is $45.00, per race until the betting bank has doubled again, and so on, and so on.
The current Charity Challenge on my website is being run this way. The betting bank is sitting at around 48% ROI and hopefully will double soon. However, we will not be removing half the profit as we do with our own investing, instead we will let it run. This is for charity, so there is no need to pull profits for us.
Note 1: The $1,000 cited above is is an example only. Your betting bank can be any amount, as low and as high as you like. What is important is that you only bet 2%, and build your betting bank. Start small, take your time, to build your betting bank. Practice patience - it's good for investing.
Note 2: The Paid Subscription Service will commence 1st June 2013. Let us know if you’re interested in joining.
Until next time, may everything we select be 'fleet of foot'.
Regards
The team at Racestrat