Bankroll management is a relatively new term to the world of sports betting & gambling. Bankroll management or BM for short is, simply put, how much you bet per play.
The issue is that many bettors (90%+) have no bankroll management at all, meaning they will lose a lot of money in the long run from continually going broke when they hit a cold run and trying to have the “one big win” to recoup all the losses previously.
This is the single reason why bookies and betting companies are so successful and profitable.
Both of the below management methods that we talk about in this article were actually started in the profitable trading/investing firms. It was a way they could mitigate risk, whilst at the same time make profits for their clients.
It was also a way for them to show individual prospects what they could do regardless of the financial figure in play. Instead, they were related to “units” or “%BR” which is exactly what we are going to talk about today.
Bankroll Management Methods
There are generally 2 ways in which you can establish correct bankroll management:
The Unit Approach
The unit approach involves placing a fixed financial amount (say $10) on every bet. This means you will place a bet of $10 at odds of +100 (EVS) or greater and you will place MORE (to profit $10) on odds less than this.
For example, if you wanted to place a bet at -200 or 1/2 on, then you would simply lay $20 on the bet, to return a profit of $10. This is generally seen as the easiest way to ensure (assuming your picks themselves are profitable) you make a profit at the end of the year.
The unit method is very beginner friendly. If you have not used bankroll management techniques previously, we would highly recommend getting started with this.
The primary advantage to our unit method is that anyone can choose a unit that suits them and run with it for a specific period, for example, $1, $10, $100, $1000 or even $10,000 per bet. Obviously, for stronger bets, you can still have 2/3 unit plays and for weaker ones, you can still lay 0.5u on a bet.
For example, $1, $10, $100, $1000, $10,000 per bet. Obviously, for stronger bets, you can still have 2/3 unit plays and for weaker ones, you can still lay 0.5u on a bet.
You may have seen the unit approach in action from our ‘How To Earn 200% ROI A Year‘ post.
This method involves placing bets based on how much you have in your bankroll.
For example, if you have a very strong bet you may place 3% of your bankroll on this bet. If you have a less confident bet, you may only place 1% and a max bet would be in the 5% region.
Generally, this is seen as the best way to calculate bet amounts, simply because your account grows proportionally throughout the year.
For example, when you go on a winning streak a 3% bet will be a lot more money than a 3% bet in the previous month.
This strategy works well for longer-term profitable bettors, whilst at the same time if you are going to blow your entire account it will take a very long time as each time you are betting less and less than before.
The primary advantage for the %BR technique is that your overall bankroll will increase proportionally to how well your picks do.
When it comes to units the main issue is when to increase your unit size and by how much. You need to accommodate the hot and cold streaks that all bettors go through and your bankroll management needs to mitigate the risk of this as much as possible.
My personal advice is to increase your units when you double your bankroll.
For example, if you start with $3,000 with a $100 unit, once you reach $6,000 you should increase your units to $200.
But remember if you are less risk-averse you can also go to $150 per unit and still gain some of the ROI benefits.
How Much Capital Should You Start With?
This depends on whether you use the unit approach or %BR strategy:
This depends on the size of your unit. For example, if you selected a unit size of $100 then we would recommend a bankroll of AT LEAST $3,000. In many cases, people would say to start with $5,000.
Again, this does depend on the quality of your picks. If you are only an amateur bettor and aren’t following anyone “guaranteed” to make you a profit, then we would recommend either starting with a lower unit amount or increasing your starting capital.
High quality picks = bigger units
And as always, never bet more than you can afford to lose. But hopefully, with the unit approach, this would be very difficult anyway.
This is the bankroll management technique we use for our NHL betting tips service so it’s one you must learn before becoming a VIP member.
Again this doesn’t actually matter and should depend on how much you can afford to lose… Although we believe that statement, we do think you should deposit a relatively high amount of money depending on your personal situation.
For example, for someone that makes $100,000 a year, they should probably deposit around $10,000 and use 1-3% per bet.
This is proportionally correct to their earnings.
Some people might say this is too high, but we think the issue, in this case, would actually be the confidence in the picks rather than bankroll management.
For example, if you played 3% of your BR on every single pick and lost EVERY SINGLE BET you made (assuming 3 bets per day) it would still take you over 3 months to lose all your money….
And of course, losing 200 bets in a row is impressive in itself.
Now, even with everything we have discussed so far, there is still one further thing you need to know about why you need bankroll management for sports betting.
And it’s all to do with mindset.
Rational Decision Making
Bankroll management makes the amount of money you place on each bet irrelevant. As you start to think in terms of units or percentages, rather than the actual monetary value of the bet, you can make much better decisions on each bet.
Your focus shifts from “how much can I win from this bet?” to “based on the information I have, should I make this bet?”
We can guarantee that if you are making money-focused bets, you are doing one of two things:
This is irrational thinking. Know what else is irrational? Expecting to end your long-term losing streak by repeating these same plays over and over again.
At the end of the day, your bankroll is finite and poor decision after poor decision will reduce it to pennies.
Move away from money-focused thinking to rational decision making.
Our goal is to grow this sport investing community to a point where we make betting companies take note.
Learn more about our unique motive for sports betting here.