Bankroll Management: A Beginner’s Guide to Not Going Broke

December 15, 2020by Anthony George1
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Bankroll Management: A Beginner’s Guide to Not Going Broke

Bankroll Management: Allen Iverson Could Learn a Lesson or Two From Us

We've all been there. You're staring at your balance and that $1000 you deposited a week ago has dwindled down to a measly $7.10. You got a mini Allen Iverson on one shoulder and a Dennis Rodman on the other. Laughing at you. You’re just as broke as them. Pathetic. Your wife hates you, and your children don’t respect you. You are probably wondering where it all went wrong. Okay, maybe it’s not that dramatic, but the truth is, this is a recurring theme among amateur sports bettors. It doesn't matter how great of a handicapper you are, not having proper bankroll management is detrimental to any serious growth. Fortunately for you, I'd unknowingly volunteered myself as a guinea pig the first couple of years of my gambling journey. I’m going to teach you the basic methods of properly managing a bankroll, something I desperately wish someone had taught me.

Individual Betting Size

It doesn't matter if your starting bankroll is $100 or $10,000, there are two basic approaches to bankroll management. How you decide to risk your money is entirely up to you, but it's important you adopt at least one of these methods. Correctly sizing your bets is one of the most important ways to grow your bankroll.

The Unit

The first method the majority of serious sports bettors use to manage their bankroll is called a “unit.” Units are a strict financial value put on each bet. This is a percentage of your initial bankroll you plan on risking. Although it may seem straightforward, the concept is not as simple as only betting $20 on every bet you make. For beginners, that $20 will probably be way too much to risk on a single bet. This unit technique is nice because it doesn't require much math and can be applied to any size bankroll. Traditionally, the value of a unit consists of somewhere between 1% and 3% of your bankroll. It's actually quite seldom that you see professional handicappers even actually hit that 3% as a unit when using this approach. So for our sake, we will stick to the standard 1% unit size.

Here are a couple of examples of what a 1% unit size looks like with varying bankroll amounts:

  • For the standard bankroll of $1000, one unit size of 1% would be equal to $10.
  • For a bankroll of $100, it would be $1.00.

It's important to note that although this method is reducing your risk, it's also limiting your return. As your bankroll grows, you might be missing out on profit because your unit size stays the same. If you start with $1000 and at the end of the week you're at $3000, your unit size still stays at that initial unit of $10. This can be a bummer, especially if you are on a heater. If you want to adopt a bankroll management style that is more flexible as you win, you might be more interested in Bankroll Percentage.

Bankroll Percentage

This bankroll management approach shares a lot of similarities with the unit size technique. It is also based on a percentage but in a different way. As you become more profitable and your bankroll grows, the amount you risk per bet also increases. For example, let's say you started the week with $1000 and were betting 2%. If you are up the following week, to $5000, your bet size would still stay at 2%, but the amount of the bet would increase because you are leveraging the entire amount of your bankroll at all times.

It really is that simple. This is why these two methods have become the most popular way of managing a bankroll. They are easy to follow and can be utilized by anyone. I know the thought of risking $1.00 per bet might seem laughable at first, but if you truly consider yourself a “sharp” bettor, your bankroll will increase in no time.

Manage Your Overall Risk

A mistake I made when I was first adopting these principles was not actually sticking to them. As soon as I would start to see progress, I would increase my betting size and end up at square one. Don’t be like me. Here are some other ways to set your future self up for success.

  • Set a Max Bet: Occasionally, you’re going to see some favorable lines you might want to hammer. Instead of risking half your bankroll, set up a standard maximum amount of units for spots like these. In the case that it doesn’t work out, you would save yourself from going broke.
  • Avoiding Parlays: I get it, parlays are really fun. When in the off chance they actually hit, it’s an amazing rush. But when they don't, it’s an absolute bankroll drainer. If you must play these, treat them as what they essentially are, a lottery ticket. It's advisable to only risk .5 of a unit or less on these.

Manage Your Emotions

  • We all have a team we root for, but don't let that influence where to throw your money. More times than not, I see people talking themselves into backing their favorite teams due to cognitive dissonance.
  • With any type of gambling, there is going to be some variance involved. If you are managing your bankroll along with making sharp picks, you should experience success.

The bottom line is, if you want to become profitable, you have to pick the winners. Of course, this is easier said than done. That's where The Odds Factory comes in. We have no shortage of FREE data, trends, and advice to help you become profitable in both the short and long run. Now that you are familiar with bankroll management, come join us and let's start beating the bookies together.

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