First principle of money management:
1 - 2 apportionment of Capital between working Capital and Reserves.
Progressive staking plans call for increased bets
under certain circumstances, and this is where Money Management plays it's
vital role. One of Money Management's vital functions is having the necessary
funds available at any time to make any bet required by the staking plan.
My first rule of Money Management is to haveSEVENbanks
available at the start of any staking plan.
Now as I like to have more than one plan operating
at one time this means I have to have seven banks for each method, at the
moment I am running up to four simultaneous methods, but let us take a
Mythical Punter to illustrate my Money Management ideals:
This Punter decides to invest sufficient funds in punting to return $50,000 p.a.
He has 5 different strategies their anticipated annual rates of return are:
He decides to invest equally in all 5 strategies so that his average annual rate of return is 40%, (alternatively he could use twice normal bank size on the 45% system and half normal on the 33% system and increase his average or overall return to 42%) and various other combinations, he realises that he will be able to average around 4% bank interest on the total resources.
So with an average return ON BASE BANKS of 40% plus 4% on seven times that amount his average return would be 9% to produce $50,000 p.a. he should then invest $560,000 as follows:
Expected returns 40% on current account of $80,000
.. ............ ....$32,000.
4% average return on reserves of $480,000....................................$19,200.
The Seven bank system is explained in detail in
staking plans.
Suffice to say it is 90% 'safe' but if more than
one method is being used simultaneously, then 90% safety can be achieved
on a sliding scale as follows:
Expected returns 40% on current account of $ 110,000
............$44,000.
4% average return on reserves of $220,000..............................$
..8,800.
If you would like to try this approach on a smaller scale it works out that you should have a current operating account of 1/3 of your total resources, which you then divide by the number of methods you are operating, take for example a person with $1,000 to invest on 5 methods:
Expected annual return 40% on current account
of $ 350. ............$ 140..
4% average return on reserves of $ 650. ......................................$
..26.
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.
Annual "take-out"..................................................$.10,000.
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:
2. By monitoring returns on investment. Again good staking plans will do this for your betting account - you have to do this to ensure you get the best possible returns on the No2 and No3 account.
3. By keeping as many investment options open as possible so as to be able to chose the highest returns. For the true 'Professionals' at the higher end of the scale this means opening T.A.B. accounts with N.S.W. SUPERTAB and say QUEENSLAND, and keeping accounts with one or more bookmaker, and constantly monitoring the available odds for your selections.
4. By minimising losses or outgoings, including Taxation. This again is an important part of a good staking plan, as to Taxation that is a subject in itself, which not being a licenced Taxation Agent the law prevents me from giving advice.
Third principle of Money Management:
Budgetary Control.
This is put into practice by the following methods:
2. Monitor actual performance against budget.
3. Analyse variances from budget.
4. Take appropriate and punctual action.
You will never get anywhere unless you know where you are going, and even if you did you would not know. - think about that -
1. In the first principle of Money Management we could not apply
the principle until we had a 'Plan'.
2. If we do not have a 'realistic' plan we will not achieve it,
and may as well not have it. In fact an unachievable plan is more financially
dangerous than no Plan at all.
3. If we do not have a fair deal of detail in our plan we will not
know we have strayed from our plan until it is too late to recover.
4. If we do not punctually and consistently monitor our plan, again
we will not know we have strayed from our plan until it is too late to
recover.
5. We must analyse all significant variances from our plan, both
adverse and beneficial, indeed more profit can generally be made from analysing
beneficial variances than from analysing adverse variances.
6. Take appropriate and punctual action to correct the adverse variances
and magnify the beneficial variances.
Our $1,000 punter above had a budget of $117 profit for the year, by analysing past performances and turnover of the 5 plans he should soon be able to build a 'budget' of his likely outgoings and returns that will be the detail behind the $20 per month profit.
The $5 per week profit must be allocated to the various systems, and POT% on each system 'budgeted', the punter should soon have the 'feel' for how many bets per week, the size of the bets, the % returns the 'normal' run of outs etc etc. and he must monitor this EVERY WEEK, EVERY MONTH and get the 'feel' for what are normal fluctuations as distinct from significant variations, he must however be cautious of 'reacting' rather than analysing and then acting. Taken corrective action too soon can be just as harmful as not taking corrective action soon enough, only experience will teach the difference, but without a plan and without constant monitoring you will never begin this learning process. But be sure it is a very wise saying 'that he who fails to plan, by default, plans to fail.'
This budgeting and monitoring process applies on many levels and sub-levels, within the detail of every 'system' as well as the overall progress. I have seriously considered, but not personally got around to it, to continually monitor two additional systems with 'paper bets' so that at any time analysis demands the abandonment of a complete 'system' then you have one or two tried and reliable systems on the reserve bench.
Fourth principle of Money Management.
Always be aware of, and searching for, better alternatives.
This is applied by:
This follows on from above you cannot 'budget'
for alternatives, as if you did so they would be part of the plan and no
longer alternatives.
But be ever on the alert for new methods, new
services, new facilities -'computerisation' - new banks, different investments
for the "Reserves" - and what they can do to improve your Return On Investment.
==============================
We want to make a nice little $100 per week and we are going to use
the
three methods detailed in the Newsletter
page.
The A B C simple betting plan calls for an average of 30 units invested
per week,
we plan on a POT of 15% for this method. Turnover 1,500 units
p.a. recommended base bank 250 units, therefore anticipated that we will
turn the base bank over 6 times p.a.
with a POT of 15% this means a return of 90% of bank p.a.
The 50/% Place Plan turns over around 25% of base bank per week therefore
annual turnover is around 12 banks p.a. @ POT of 10% this means a return
of 120%
of bank p.a.
The PenStep Win Plan turns over around 8% of base bank per week therefore
annual turnover is around 4 @ POT of 16% this means a return of around
64%
of bank p.a.
On average therefore we can expect around 90% of base bank return,
and we
can expect $700+ bank interest on reserves, so we have to earn
around $4,500
which is 90% of say $5,000. So total base bank is $5,000 this
is in 3 methods
so $1,700 per method.
Our betting bank will be 3 x $1,700
say..
= $ 5,000.
Total of 11 banks less 3 active = 8 reserve @
$1,700 ea (No2/No3 accounts)..13,600.
Go Broke - Special Reserve No 4 account ................................................
.6.400.
Annual "take-out".$100 p.w................................$.5,200
Account No 1.
opening balance $5,000.- current account.
Account No 2.
opening balance $5,000.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
Take to the track $2,500 from current account.
Money in wallet
$2,500
Before race 1 take B Place parlay 11 $7.50 units (<0.5%) $82.50
$2417
Melb 1/1 $7.50 Win all up each of B1/1 B6/2 M8/1. . .$22.50
2396
Melb 1/1 A category win bet 6 units $45.
Penstep win 6units$45.
Place 50/% 6% $100. = 90x100
2204
Melb 1/1 wins collect. . . . . . . . . . . . . . . . . . . . . . .
. . . .$310
2514
Bris 1/1 B category $15x$15.
Win plan $22.50 Place Plan $60
= 37.5x75
2402
wins collect. . . . . . . . . . . . . . . . . 415
2817
M 1/1 allup B 1/1
collect
136
2953
Melb 2/1 C Category $7.50 eachway
Win Plan $7.50 Place plan $22.50 = $15x30
2908
placed collect. . . . .. . . . . . . . . . . ..50
2958
Syd 4/4 Category C $7.50 eachway
Win Plan $15 Place Plan $$37.50 = $22.50x$45
2890
No collect
Bris 4/2 Category B $15 eachway
Win Plan $37.50 Place Plan $120 = $52.50x$135
2703
No collect
Melb 6/3 Category C $7.50 eachway
Win Plan $22.50 Place Plan $52.50 = $30x$60
2613
No collect
Syd 6/5 Category C $7.50 eachway
Win Plan $22.50 Place Plan $90
= $30x$97.50
2485
Wins . . collect . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . $284
2769
Bris 6/2 Category B $15 eachway
Win Plan $30 Place Plan $217.50
= $45x$232.50
2491
Wins . . place
collect .. . . . . . . . . . . . . . . . . $465
2956
B Place parlay returns $267.75 3224
Take weeks wages.. 100.
Rebank . . . . .$3,124.
Account No 1.
opening balance $5,024.- current account.
Account No 2.
opening balance $5,600.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
Take to the track $2,500 from current account.
Money in wallet
$2,500
Before race 4 take Bdoubles and treble with 2 B selections
and 1 A selection.Place parlay 4 $7.50 units $30
$2470.
Take reverse win all-ups A 4/1 and S 7/3 into A Bet B 8/1
$15
2455
Adel 4/1 B category win bet 4 units $30..
Penstep win 6 units $45.
Place 50/% 7% $127.50. = 75x127.50
2252
Unplaced.
Syd 7/3 C category $7.50x$7.50
Win plan $22.50 Place Plan $60
= 30x67.50
2154
wins collect. . . . . . . . . . . . . . . . . 590
2744
Bris 8/1 A Category $45 Win
Win Plan $52.50 Place plan $150. = $97.50x$150
2497
B Place parlay returns Nil.
Take weeks wages.. 100.
Rebank . . . . .$2,397.
Account No 1.
opening balance $5,021.- current account.
Account No 2.
opening balance $5,500.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
Take to the track $2,500 from current account.
Money in wallet
$2,500
Before race 1 take B Place parlay 11 $7.50 units $82.50
$2417
Take 1 unit Win all-ups 2 A,s into 4 B,s
$60
2357
Adel 4/1 A category win bet 6 units $45.
Penstep win 12 units $90.
Place 50/% 10% $195. =135x195
2027
Adel 4/1 wins collect. . . . . . . . . . . . . . . . . . . . . . .
. . . .$657
2684
Syd 7/1 A category $45 win.
Win plan $45 Place Plan $200
= 90x200
2394
unplaced..
Bris 7/6 C Category $7.50 eachway
Win Plan $15 Place plan $52.50 = $22.50x$60.
2311
wins collect. . . . .. . . . . . . . $227.50
2538
B Place parlay returns $12.50 2550
Take weeks wages. 100.
Rebank . . . . .$2,450.
Account No 1.
opening balance $5,071.- current account.
Account No 2.
opening balance $5,400.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
Take to the track $2,500 from current account.
Money in wallet
$2,500
Before race 1 take B Place parlay (3 bs+1stA)11 $7.50 units $82.50
$2417
1 unit win all-ups 2 As into 4 Bs.............$60
2357
Melb 1/1 A category win bet 6 units $45.
Penstep win 6 units $45.
Place 50/% $187.50. = 90x187.50
2079
Melb 1/1 wins $3.00 win $1.40 Place collect.
. . . . . .$532.50
2611
Adel 3/2 B category $15x$15.
Win plan $15 Place Plan $75
= 30x90
2491
wins $3.60 win $1.70 place..... collect.. . . . . . . 261
2752
and 2 As allup pays. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 124
2876
Syd 4/6 B Category $30 Win
Win Plan $30 Place plan $120 = $60x120
2696
placed $1.60 ..collect. . . . .... . . . .192
2888
Syd 5/3 Category C $7.50 eachway
Win Plan $15 Place Plan $$37.50 = $22.50x$45
2820
placed $1.70. . . . . . . . . . . . . . . . . . . .collect. . . . .
. . . . . . 76.50
2896
Bris 6/8 Category C $7.50 eachway
Win Plan $52.50 Place Plan $120 = $60x$120
2716
Placed $2.50. . . . . . . . . . . . . . . . . . . .collect. . . . .
. . . . . .300
3016
Place parlay pays. . . . . . .
15
3031
Take weeks wages..
100.
Rebank . . . . .$2,931.
Now being months end we re-arrange out accounts
Account No 1.
opening balance $5,071.- current account.
withdraw $2,500 rebank $2,931 balance $5,502.
transfer $500 to No 3 Account as month end.
Account No 1.
balance carried forward $5,002.
Account No 2.
opening balance $5,400.- 7 day term deposit.
transfer $500 to No 3 account.
balance carried forward $4,900
Account No 3.
opening balance $9,000.- 30 day term deposit.
transfer from account No1
500
transfer from No 2 account
500
balance carried forward
$10,000.
Account No 4.
opening balance $6,000.- 90 day term deposit.
Therefore we now have:
Account No 1.
opening balance $5,002.- current account.
Account No 2.
opening balance $4,900.- 7 day term deposit.
Account No 3.
opening balance $10,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
We have in fact made a profit of $1,302 during the month and taken
$400 in wages and left $902 in reserves.
We took our $100 per week win lose or draw.
We returned our current account to $5,000 at the start of each week.
We transferred surpluses during the month to the No 2 Account.
At the Month end we rounded off the No 2 Account to $5,000 to the nearest
$500 by transfer to No 3 account.
This takes the 'trauma' out of short term fluctuations so that you
can concentrate
on the long term plan.
Give me your comments by email - just "click" below..
1st Janaury
Account No 1.
opening balance $5,071.- current account.
Account No 2.
opening balance $5,400.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
Take to the track $2,500 from current account.
Money in wallet
From 11 original selections only 3 qualified as value bets for
the win bet strategies.
$2,500
Bris 3/2 A Category $45 Win
$130 Win Plan
$210 Place Plan
$7.50 Win all up M 4/5
$7.50 Win all up M 7/9
2,100
Wins pays $3.60 Win and $1.60 Place returns $962
3,062
1 unit place doubles B3/2 - M 4/5; B 3/2 - M 7/9; M4/5 - M 7/9
and treble
3,032
M 4/5 Category B $30 Win
$30 Win Plan
$140 Place Plan
2,832
Wins and Pays $4.20 Win $1.90 Place. returns $ 518
3,350
B 3/2 - M 4/5 Win and place doubles return $137
3,487
M 7/9 Category B $30 Win
$50 Win Plan
$240 Place Plan
3,167
3rd and Pays $1.60 Place. returns $ 384
3,551
B 3/2 - M 7/9 place double returns $18 place treble
$34
3,603
Take weeks wages.. 100.
Rebank . . . . .$3,503.
3rd Janaury
Account No 1.
opening balance $5,074.- current account.
Account No 2.
opening balance $6,400.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
$26,474.
Take to the track $2,500 from current account. Money in wallet
$2,500
No A Category Qualifiers.
B Place Parlay B 2/1-A3/2-S6/5-M6/9 2,417
Syd 1/4 C Category $7.50 eacway
$20 Win Plan
$30 Place Plan
Unplaced
2,352
B 2/1 B Category $30 Win
$50 Win Plan
$220 Place Plan
2,052
Won Paid $3.10 Win $1.40 place returns $556
2,608
Adel 3/2 Category B $15 eachway
$40 Win Plan
$210 Place Plan
2,328
3rd paid $2.20 place returns $495
2,823
Syd 6/5 Category B $30 Win
$60 Win Plan
$170 Place Plan
2,563
unplaced
Melb 6/9 Category B $15 eachway
$140 Win Plan
$390 Place Plan
2,003
2nd paid $2.00 Place returned $810
2,813
B Place Parlay returned $163 2,976
Adel 7/1 C Category $15 Win
$30 Win Plan
$60 Place Plan
2,871
2nd paid $1.60 place returns $96
2,967
Take weeks wages.. 100.
Rebank . . . . .$2,867.
10th Janaury
Account No 1.
opening balance $5,141.- current account.
Account No 2.
opening balance $6,700.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
$26,841.
Take to the track $2,500 from current account.
Money in wallet
$2,500
Before race 1 take B Place parlays
11 units Parlay Sydney 4/8 5/2 7/7 8/1
Parlay M 1/1 B 1/1 A 3/3 S4/8
Parlay A 3/3 S5/2 S7/7 B7/9 33 units @ $7.50
2252
Bris 1/1 B Category $30 eachway
Win plan $130##
Place Plan $120
Places and pays $1.60 Place collect . . . . .$240 . . . .
2182
The Win and Place Plans will be about 70% of that shown on the table
in the Newsletter as that bank is $2,500 compared to this one of $1,700
all rules the same.
Adel 1/2 C $7.50 eachway
$30 win plan
$30 Place plan
unplaced
2107
Syd 2/1 C $7.50 eachway
$30 win plan
$60 Place plan
unplaced
2002
Adel 2/1 No win bet odds not available
10 all ups in and out of all B selections
1927
Adel 3/3 B Plan $30 Win
$130 win plan
$370 Place Plan
Placed and paid $ 1.90 return $703
2100
Adel 4/2 B Plan $30 Win
$130 win plan
$280 Place Plan
Won paid $2.60 win and $1.40 Place return $808
2568
Syd 7/7 B Plan $30 win
$90 Win Plan
$200 Place Plan
Won paid $3.40 Win $1.50 Place returned $708
2956
Bris 7/9 B Plan $30 Win
$90 Win Plan
$270 Place Plan
Place paid $1.50 returned $405
2971
Melb 8/1 B Plan $15 eachway
$70 Win Plan
$200 Place Plan
unplaced
2671
Syd 8/1 B Plan $30 Win
$120 Win Plan
$350 Place Plan
unplaced
2171
The place parlays return $14 + $157.50 + $9 2351
Take weeks wages.. 100.
Rebank . . . . .$2,251.
Account No 1.
opening balance $5,092.- current account.
Account No 2.
opening balance $6,500.- 7 day term deposit.
Account No 3.
opening balance $9,000.- 30 day term deposit.
Account No 4.
opening balance $6,000.- 90 day term deposit.
$26,592.
refer back to staking and systems
pages
The MAJIK - OZZIE Combo on 27/3/99.
Selection
Bet
Return
Prog win/lose
Caulf Race 2 No 9 | Smyters Fury | $10.00W | 0.00 | -$10.00 |
RHill race 2 no 4 | Rainbow Bubbles | $20.00W | 0.00 | -$ 30.00 |
Dben race 2 no 3 | Gay revenger | $ 30.00W | 0.00 | - $60.00 |
Chelt race 2 no 12 | Odins Seal | $ 40.00W | 0.00 | - $100.00 |
Rhill race 3 no 1 | Lawyer | $ 50.00W | 0.00 | - $150.00 |
Dben Race 3 no 2 | Sea harvey | $ 60.00W | 0.00 | - $210.00 |
Rhill race 4 no 1 | Savannah Success | $ 70.00W | $245.00 | - $35.00 |
Chelt race 5 no 6 | Nina Haraka | $50.00W | $70.00 | - $15.00 |
RHill Race 6 no 7 | Making Fey | $ 60.00W | $0.00 | -$75.00 |
Caulf race 7 no 1 | Trips | $ 70.00W | $0.00 | -$145.00 |
Dben race 8 no 5 | Rash Action | $ 80.00W | $536.00 | $311.00 |
$ 540.00 | $851.00 |
Where as the flat stake betting for a win would return
a POT of 5%
this $311 profit on an outlay of $540 represents a POT
of 58%.
For the three months to 27th March 109 bets seen total
outlay of $3,490
return $6,273 Profit $2,783 POT 80%.
Highest bet called for was $80.
After losing $10 on the first bet, and winning
$30.00 on the second bet on 2nd January this combo never went into 'the
red' again.
..
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