the richest man in atherstone

I must apologise for not posting over the previous month. I've been enthralled with the World Cup but as usual England have been knocked out in the quarter final stage via penalties. Roony should never have been sent off! However, I won't go into my opinions of the team and tactics. I don't think I have enough webspace for that and besides, this blog is about money and not football. Instead I'll tell you of a little experiment I tried during the tournament to try to increase my wealth...

The Aim
To generate at least a 50% return on an initial stake of £100 by betting on the outcomes of World Cup matches. In other words, I want to turn my £100 into £150 using my footballing nous.

The Rules
The following rules must be followed during the experiment:

1. No more than £50 can be staked on any single bet.
2. I can only bet on the favourites. No speculative gambling.
3. The experiment ends when either I have expended the whole of my £100, I have created £150 or the tournament ends. Whichever comes first.
4. Winnings can be re-staked.

The Theory
If I were to invest £100 in a top savings account for a year, I would earn around £5 per annum or about 42p per month, and that's before tax. If I were to gamble it, I have the potential to earn a lot lot more, but my capital is risked in the process.

A lot of sources tell me that gambling is not an investment vehicle. In my opinion, it is a different means to the same end. Using money to make money. In a savings account my capital is guaranteed (more or less) but the rewards are small, as highlighted above. When buying shares or investing in funds, the value can go down as well as up as I have previously discovered. More risk equals more reward. Gambling is very risky but if consistently done well can reap better returns than other investments. Conversely, if consistently done badly, a lot of money can be lost in a relatively short period of time.

I'm not new to having the odd flutter. Over the last 6 months, I've joined many online betting websites as part of another experiment. More details on that in a couple of months, however, I can say I've made a fair bit of money using this strategy (hundreds of pounds) and it is much less riskier.

I should add that I am quite prepared to lose the whole of the £100 I am staking in this experiment and I can easily afford it. Although the main aim of the project is to make money, I am also using this opportunity as a learning experience. I have always wondered if I could make a second income by gambling and this is a great time to try out the idea rather than just talking about. I would not recommend anyone try this out for themselves.

The Results
And here are the results of my experiment. Odds are in decimal format. The winnings do not include the stake, which is also returned upon a winning bet.

Bet 1 - 17/06/2006 - Portugal vs Iran, Portugal to win @ 1.36, £50 Stake
WON £18.18

Great start. Lets hope it continues.

Bet 2 - 17/06/2006 - Czech Republic vs Ghana, Czech Republic to win @ 1.53, £20 stake
LOST £20

I had the Czechs down as reaching the knockout stages especially after winning their first game. Looks like they're missing Koller and Baros. Credit to Ghana, though. They played very well.

Bet 3 - 17/06/2006 - Italy vs USA, Italy to win @ 1.36, £48.18 stake
LOST £48.18

Bugger. I thought that one was a dead cert. Maybe I should've started betting during the first set of matches when a lot of the favourites were winning.

Bet 4 - 18/06/2006 - Japan vs Croatia, Croatia to win @ 1.56, £25 stake
LOST £25

Another loss. I'm getting quite disheartened...

Bet 5 - 18/06/2006 - Brazil vs Australia, Brazil to win @ 1.22, £25 stake
WON £5.56

Hooray. A win again. Not very much though.

Bet 6 - 18/06/2006 - France vs S. Korea, France to win @ 1.36, stake £30.56
LOST £30.56

There you have it. A complete disaster! In all, I won 2 out of 6 bets which totalled winnings of £23.74. I lost my £100 plus the winnings of £23.74 which were re-staked. My experiment lasted just 2 days.

Conclusion
Well, what can I say? I had been a big advocate of gambling as a money making scheme, but the results speak for themselves and I know when I'm beaten. I had expected this experiment to prove my idea right and maybe kick off (no pun intended) a new career as a Professional Gambler, but instead I have to say that gambling is a mug's game based on this experience.

On the plus side, I feel i'm a little wiser from doing this, and the fact that I actually went ahead and did something instead of sitting on my arse has to be admired (by me, at least). I now know that gambling is not a viable investment vehicle for my money and I can dedicate my time to discovering and creating more options. It was enjoyable but I must admit to feeling a little bit like Arkad in 'The Richest Man in Babylon' when he entrusted his gold with the brickmaker for business venture as a jewel merchant (if you don't know the story, buy the book). There is also a lot of advice to never risking your capital to get large returns, which unfortunately I overlooked. The book was right again!

Coming soon will be a much more reliable money-making scheme that involves gambling where the odds of coming out on top are almost guaranteed. I've made a few hundred with this method already but am awaiting a few more pounds before I publish the article.