16%+ per annum return - BEFORE AND AFTER TAX - for a sound business investment.

And that is what these pages are all about ... no pie in the sky ... good sound business principles applied to punting. One of the 'systems' will 'go broke' sooner or later, usually about once in 20 YEARS,what I recommend in that circumstance is that having lost 40% of your total bank, in the first example above 7 banks of $22,000 ($154,000) Yes one day it will happen. You then reduce your 'take-out' by 25% for 10 years, that is instead of taking out 16% of your original $330,000, you now take 12% of your original $330,000 or $40,000 p.a. your bank in the meantime has fallen to $190,000, but by reducing your take-out to $40,000 you will build the overall bank back to the original $330,000 in around 10 years. This might sound like a long term plan IT IS you will only ever succeed in this business by long term planning.

There are many different approaches using these basic principles, one more I will detail is the ultrasecurity approach
 

Say you are semi-retired and would like to make punting an interesting and profitable hobby, you have $100,000 you could 'risk' and a return of $10,000 p.a. would be nice for 'chrissy' and an annual holiday fund, but you want to reduce the risk factor to less than 1%.
Then amend the first approach from the 3 account approach to the 4 account approach

Our betting bank will now be 25% (not 33%) of the overall bank = $25,000.
So split this between 5 systems and we have 5 x $5,000. .............................$.25,000.
Total of 15 banks less 5 active = 10 reserve (No2/No3 accounts)................ $.50,000.
Go Broke - Special Reserve No 4 account ..................................................$.25,000.

13% per annum return - BEFORE AND AFTER TAX - for a sound business investment.

The No 4 account is not used for normal fluctuations which are handled as explained in the following paragraph, in the 1 2 and 3 accounts, the No 4 account is only utilised when one of the systems "Goes Broke" and thereby loses $35,000 (7 banks), by adding back $3,000 p.a. to the No 4 account you can go broke every 12 years without as much as a 'hiccup' and this should only happen on average once in 20 years, and since a 'retiree' has a 'life-span' of only 20 years average it is ultra safe.

Application of Principle No. 1.

Open THREE accounts with 1/3 of your funds in each.

The first account is an operating T.A.B. Account or a bank account from which you take your daily 'betting funds".
The second account is placed on 30 day Fixed Deposit.
The third account is placed on 90 - 360 day Fixed Deposit.

During each month you operate on the first account, depositing thereto all interest from accounts two and three and withdrawing therefrom all betting moneys and returning thereto all betting returns at the end of each betting day.
If you want to treat this as a 'real' business you can also withdraw from the No 1 account a weekly, monthly, or annual salary of the 'budgeted' amount of profit.
At the end of each month the No 1. account is returned to it's 'base' amount, as an example our $1,000 punter would withdraw any excess over $350 from this account at the end of each month and deposit this amount to the No 2. account, if the end of month balance of the No 2. account is less than $350 it is 'built up' from the No 2. account.
Normally throughout the year this is the only transaction needed.
At year end both No 1 and No 2 account are restored to the 'base' amount, in this case $350 each the shortage or surplus goes/comes from the No 3 account.
As an alternative to this I allow myself an annual bonus from any surplus.
If the betting has been 'escalated' and a bad run occurs such that there are insufficient funds in the No 2 account to build the No 1 account back to base, then at that month end both No1 and No2 accounts are built back to base from the No3 account. This could on occasion result in a penalty interest payment.


This strategy is the most important part of Money Management. Staking Plans sometimes require larger bets at strategic points, and if the larger bets are beyond one's 'comfort zone' this is where the whole "Business" strategy breaks down. The trauma of the bigger bets is not only the size of the bets, but the fact that you are on a losing streak and have less cash in your kick, this Money Management strategy removes the second factor by always having the same amount of betting money at the start of each and every month, no matter win lose or draw.


Second Principle of Money Management.

Optimize Return on Investment.

This principle is put into action in four basic ways:


Third principle of Money Management:

Budgetary Control.

This is put into practice by the following methods:

Copyright © 1996
Last modified:2/1/01