Hold ‘Em or Fold ‘Em: 6 Laws of Wealth at the Track
By Ray Wallin
Hang around the track long enough and eventually you will meet some interesting characters. There are the dramatic and the stoic. There are the quiet and the loud. There are the perennial losers and the few who make a living playing the races.
In all my years of playing the races I have met them all, but it is the professional gamblers that stand out the most in my mind. While they all bet differently, they all have many of the same principles at the core.
One afternoon while enjoying the grandstand apron at Monmouth Park a nasty storm blew in and everyone ran for cover as the sky went from blue to a deluge of rain in a matter of minutes. While shaking the water off of my hat, I ended up next to a gentleman that reminded me of Kenny Rogers in The Gambler. We made some quick small talk about the weather and how it screwed us in the next race that was now going to run over a sloppy track.
As quickly as the sky had opened up into a torrential downpour, Kenny opened up about how most horseplayers don’t know how to manage their money at the track. While I was expecting “you gotta know when to hold ‘em, know when to fold ‘em,” to come out of his mouth, instead he gave me some advice without either bumming a cigarette and asking for a light or having a taste of my whiskey.
(1) Save Part Of What You Win
I often talk about using your winnings to help build your bankroll. I started small and as I amassed winnings, I grew my bankroll which in turn grew the wager size I was comfortable playing. Kenny’s advice, though, was that at regular intervals as you are reaping profits was to take 10 percent of your profit and pay yourself. Take those winnings out of your bankroll and put them in your bank account. Let those funds help with the down payment on your house or car, put it towards the engagement ring you have been thinking about getting your soulmate, use it to take a vacation to clear your head, or squirrel it away in your emergency or retirement fund.
(2) Make Your Winnings Work For You
Besides saving a part of what you win, Kenny suggested investing some of your winnings, too. Being a little older Kenny didn’t want to wait for a bond to mature, but he had a financial planner that helped him invest some of his winnings in safer stock market plays. As Kenny quipped, “it is like having a 401k from gambling.”
(3) Avoid Debt
Sadly we all know someone who has a gambling addiction and bets with money that they don’t have or have had to borrow. Playing the races should not cause you to go into debt. You need to prioritize where you are spending your money. If you can’t pay the rent or mortgage you shouldn’t be gambling or borrowing money to gamble. If you are falling deeper and deeper down that rabbit hole, get help from Gamblers Anonymous or call 1-800-GAMBLER.
(4) There Is No Get Rich Quick System
The movies glorify the gambler. They walk into a casino or racetrack and seem to have the Midas touch. They can’t lose. They win big on every wager. Anyone who plays the races for a living will tell you that it is a grind. Some of my best angles hit 40 percent of the time which is no sure thing. You will be hot one day and have seconditis the next day.
There is no quick and easy system on the market that wins consistently. If there was, would it be advertised to the masses and be cheap? Wouldn’t the creator of that system keep it to themselves and make piles of money since no one else would be any wiser?
Have a solid long term plan. Don’t play wagers that you are not confident in. Sure, you may hit one huge trifecta from time to time when that 80-1 shot finds his way into second place, but I guarantee if you looked at what you spend in the long run to hit that one big win, you have more than likely given it all back plus more.
(5) Invest In Yourself
Not only should you save a few bucks of your winnings for a rainy day or pump it into another means of income, you should use some of your winnings to make yourself a better handicapper. I allow a portion of my yearly winnings to pay for tools that make my life easier.
I buy par times from Dave Schwarz at pacemakestherace.com. Why? I don’t have time to create them myself and they are necessary for me to create my Pace-Based Speed Figures that I used in my daily handicapping. When I figured out how long it would take me to collect and crunch the data necessary to create my own par times versus buying Dave’s I realized I would do better in a Chinese sweatshop making Nike sneakers.
Do yourself a favor and buy the tools you need. It could be par times or sire, trainer, and pedigree data. It is well worth the cost when you look at how long it would take you to create and maintain the same information.
(6) Diversify Your Fortune
Since sports betting is more widespread in New Jersey I have been relying less of racing to generate a profit. The winter months used to be my off season with minimal action that I liked to play at Gulfstream Park or Tampa Bay Downs. Now I can supplement my winter gambling with the NFL, NBA, and NHL. Monmouth Park used to run five days a week and now runs only three. No problem, there is baseball being played every day.
Four and half years ago I answered a Facebook post about needing people to write about horse racing. I figured that since I love to talk about horse racing this would be a lot of fun. It is a lot of fun and I make a few bucks doing it, so it is a win-win situation.
I am sure when you look at your 401k plan you see all the different funds that you invested in. Your money is spread across several different options to make sure you have some stability. You need to do the same with your handicapping. Start tracking and developing ways to play sports or try to make a few bucks off of your passion for the sport. When you add up all the different revenue streams your find that a little bit here and there adds up to a tidy sum.
After the rain let up that afternoon at Monmouth Kenny shook my hand, smiled with his two large chiclet front teeth glistening in the sun, and went on his way. As far as I know he didn’t die in his sleep, but he did leave me with a lot of money management ideas to think about. Over a decade later I still follow his advice and watch both my bankroll and savings account grow each year.