Saturday, 23 April 2011

Proper Income

A couple more comments on the Betfair Forum post I wrote about a couple of days ago.

A poster called 'stewarts rise' commented that

I've always been a big advocate of having a proper income away from betting as it takes the pressure off having to win, like a salesman who has a basic salary and doesn't have to rely on commision alone.
and this is a view to which I subscribe if you are in a position in life where you need an income, as opposed to 'want' an income. But there was another opinion on this from our old friend Marky Sparky who wrote
I'm not disagreeing that having another source of income takes the pressure off, but I've also thought that great people don't become great without dedicating 100% to their chosen profession e.g. Musicians etc.

I suspect that Gambling is the same. We can all grind out small edges and be profitable over time, but to truly get to the top only those giving everything will succeed.
A couple of points. One is that I could dedicate every minute of my waking hours to becoming a musician, but while I might improve, it's a right-brained activity that I have no innate talent for. Gambling though is a left-brain activity requiring logic and mathematical abilities, and that is something that I do find comes easier. Are those skills something that can be learned by all? I would say not. Maths and logic comes easily to some, but not to others, and as was discussed on this blog a few months ago, women tend not to be left-brained.

So is the statement that "we can all grind out small edges and be profitable over time" true? I would suggest not, as not all of us have the tools to work with.

How about the statement that one needs to give 100% to truly get to the top? Taken literally, only one person can be at the top, so that's not going to happen, so 'the top' is a vague term, and one that means different things to different people. I take 'the top' to mean that you are making an income from betting which significantly exceeds an annual salary (gross) of £27,976. This number comes out to about £60 a day on the exchanges, so 'the top' to one person could be £90, or to someone else a lot more.

It is more than possible to reach the top, by this definition, as a part-timer, so the question becomes one of weighing up the benefits of being full-time, i.e. how much extra income this would generate, versus the downside, i.e. the loss of a regular income and the anxiety that would accompany this. There are other factors of course. Sports investing is an unsociable world, whereas most jobs offer some social interaction, not to mention free coffee and a career path (both important, though not necessarily in that order). The career path is something not to be underestimated. If you go full-time betting, you may more than cover your current salary, but is your additional income from investing going to keep pace with your expected earnings over the years? Possibly not, and the higher you move up in the corporate ladder, if that is where your place is, the more other benefits improve - holiday allowance, flexible working arrangements, bonuses and share options. That's a lot to give up.

Why do I say that betting income will 'possibly not' keep pace with expected earnings? The markets continually change. Any edge you have can disappear literally overnight. There's the ever present possibility of regulatory changes - a ban on in-play trading for example, and while the exchange concept is still relatively new, as it matures it will become that much harder to find an edge.

I know for me that going full-time would be an unwise decision to say the least. My income from betting would probably increase slightly, but would not come close to compensating for the loss of regular income and additional stress that would involve. The law of diminishing returns. I am writing this from the perspective of a non horse-racing player, because aside from that sport, there's not too much that goes on during the regular working day anyway, and if there is, you can always arrange your schedule to cover it, but horse-racing is a dying sport anyway. The future is in sports, and weekends and evenings are when they take place.

1 comment:

Average Guy said...

Excellent as usual, " but horse-racing is a dying sport anyway" sadly I concur. I love racing and just watching racing but am finding it almost impossible to make any money trading it. I have quite a decent middle income corporate career and would love to chuck it and become a full time trader, (Traders don't like the term gambler but you are still betting on a likely outcome). I couldn't handle the stress of paying the bills and feeding the kids through trading only. It really depends on your circumstances, if I was 21, no career and minimum wage job I would chuck it in an instant. I'm not, I'm 42, I have 2 kids (1 in college) and a mortgage, It is not even an option for me. By the way, I'd love your opinion on the perceived difference between trading and gambling. I feel there is none, but many tragers are offended by this stance.