Something very bad happened to me the other weekend. I lost $800 dollars betting on the 49ers to win the Super Bowl. Earlier, I had won $600 betting on the 49ers to beat the Vikings and the Packers. But lost it all and then some when the 49ers couldn't hold onto their 10-point lead.
I told my father about my losses because I also bet him a steak dinner that the 49ers would win. Instead of showing empathy for my loss, he immediately questioned whether I have a gambling problem.
I responded with an emphatic, “No I do not!”
But isn't denial how all gambling addicts respond when they are first questioned? It's only when gamblers recognize they have a gambling addiction that they can start to heal.
Why I Gamble So Often
My dad's questioning about whether I have a gambling problem made me dig deep while I was relieving myself on my heated Toto Washlet – a life changing product that brings me great joy every day.
Between 1999 – 2012, I worked on the trading floors of two large investment banks. Every day, my colleagues and I were either taking long or short positions in stocks or pitching long or short ideas to institutional clients.
When we weren't betting on stocks, we were betting each other on The Masters, the World Cup, the US Tennis Open, the NBA finals, the NCAA tournament, and of course football.
Once, we bet our first-year analyst that he couldn't eat $20's worth of Taco Bell before tax ($30 inflation-adjusted today) in one sitting without throwing up for an hour after. He could choose anything on the menu, from burritos with extra sour cream to a large drink, both of which would be strategically unsound.
We made a $1,000 market on the floor for believers and disbelievers. Our eater would earn 25% of the pot plus all the free food if he won. He stopped at $18.60. It was so much fun! We still gave him $100 for trying.
Then, of course, I've mentioned to you my escapades playing poker at the local casino. During one $200 buy-in session, I got to know a man named Vien who borrowed $5,000 from a good friend and $2,000 from his ex-girlfriend to pay for his gambling habits.
I never thought of myself as having a gambling problem like Vien because I have never borrowed money to cover my gambling debts. But my father's words made me pause and think.
I explained to my father that gambling was in my DNA after so many years of working in Institutional Equities. But he was skeptical about my explanation and pressed on, “How long can you sustain losing $800 a bet? You should be more careful.”
To get him off my back, I retorted, “I can actually sustain losing $800 a bet 88 more times based of my Tesla winnings, baby!” Tesla's stock had risen a crazy 19.89% or $19,414.50 on February 3, 2020.
A gambling addict tends to be defiant. He or she likes to rationalize his or her bets.
For example, I started rationalizing that it was OK for me to bet $800 on the 49ers because 2019 was such a good year in the stock market. I also told myself to chalk up the $800 to entertainment. It wasn't like I was paying $5,000 for tickets and flights like my 25-year-old softball buddy who just got a full-time job.
Then I told myself I have the right to do what I wish with my hard-earned money, like a true gambling addict! Who was my father to disapprove of me having some fun.
Finally, I truly thought the 49ers had a great chance of winning the Super Bowl. And for more than three quarters, I was right. Alas, it's not how you start, it's how you finish. The 49ers and I are both losers.
Coming To Terms With Gambling Addiction
My father has made me realize that I am a gambling addict who needs help. With two kids and a wife to support, I need to change my ways before they truly get out of hand.
In one Super Bowl evening, due to my gambling addiction, I wiped away almost an entire month's worth of target passive income.
Remember, in order for me to FIRE by 45, my ultimate goal is to generate $833 a month in incremental passive income every six months in order to ultimately generate $5,000 a month in passive income by September 1, 2022.
If I don't make more passive income by 2022, I'm afraid my investment accounts will no longer be able to cover health care insurance premiums and education costs. Without enough capital, I won't get to fulfill my dream of being a full-time father to my daughter until she goes to kindergarten.
Originally, I was thinking of coming up with a framework on how much you should be allowed to gamble.
My gambling framework was to go something like this:
Step #1: Gamble only what you can afford to lose.
Step #2: Quantify how much you can afford to lose by gambling to no more than 5% of your investment profits. This way, you'll never really lose because you are only gambling a small portion of your winnings. If you have no winnings, you aren't allowed to gamble.
Example: Let's say you were up 160% or $72,000 on Tesla in 1.3 years. You could take 5% or $3,600 of your profits and gamble it on whatever you like. Perhaps you'd like to split your $3,600 into six different $600 bets. Or maybe you want the thrill of making one big $3,600 bet. It's up to you! Even if you lose it all, you're still up $68,400 or 155% on your Tesla investment.
On the flip side, if you win the bet, this would mean even more gravy for your potatoes. In a heads you're still winning, tails you win more scenario, life is pretty good.
The Best Way To Kick Your Gambling Addiction
As I reviewed my above gambling framework, however, it occurred to me that if someone has highly addictive tendencies, it would not be a good framework to follow.
After losing $3,600 on a bet, they might decide to withdraw an additional $7,200 in profits to make another bet to make up for their losses. If they lose again, then they'd be down $10,600 and the death spiral continues.
Heck, the gambler might even go on margin and lose even more money. This is how gambling addicts fall into financial ruin! They just don't know when to quit.
Therefore, I say the best way to kick a gambling addiction is to stop gambling completely. It's the same recommendation for recovering alcoholics. Instead of craving the thrill of a quick win, focus on the slow and steady way of earning money by working and saving. Visualize how many hours of your life it will take to make up the money if you lose.
From now on, I will at least no longer bet on sports and other silly prop bets until I get a steady job. For the love of Christ, someone please give me a job!
I've just consistently gambled between 5% – 10% of my investable holdings on individual publicly traded and privately held stocks for more than 20 years in a row. It's going to be really hard to stop. But with your help, I just might.
If you encounter someone with a gambling addiction who wants to make a bet with you, the best thing you can do is decline their offer. Even if they taunt you for being afraid or whatever, do not bet with them.
Thoughts On Tesla
As for Tesla stock, like a true gambling addict, I'm just going to hold onto my position until it blows up or turns into a massive home run. It's like the guy at the roulette table who gets lucky betting on black five times in a row and never takes any winnings off the table. He just wants one more double before he's done for good. But of course, red eventually hits and he ends up losing everything.
Clearly, Tesla stock is priced to perfection. Any execution missteps or earnings misses will cause the stock to tumble. The shares have run far ahead of fundamentals. Analysts will be downgrading the stock. Heck, the stock could easily correct 10%-30% on any given day given how quickly the share price has risen.
Below is a chart comparing Bitcoin’s 2017 rise to Tesla’s current rise. Scary stuff.
But unlike in 2000, when I was just a poor analyst who stumbled across an even luckier bet in VCSY, I no longer have to sell anything to live due to our current passive income streams. Having enough passive income is true freedom.
In 10 years, there is a chance that Tesla extends its electric vehicle lead, lowers production costs, builds an autonomous global transportation network, becomes a power conglomerate, creates new efficient modes of transportation, turns into the next Amazon, and also becomes highly profitable. Just in case Tesla does reach all these goals, I don't want to miss the electric bus.
Therefore, I'm hoping Tesla corrects back down to the $500 – $600 range so I can buy more. If not, I'm just going to hold onto my 150 measly shares and see what Elon has in store for the world. I enjoy betting, err I mean investing, in entrepreneurs who are always looking into the future.
Despite Tesla's performance, I got to admit, losing $800 and then losing the Super Bowl still really hurt. It's time to make back my losses one laborious hour at a time.
Pay Attention To Your Money
One way to help kick your gambling habit is to diligently track your wealth. This way, you are aware of your bankroll and can also more viscerally feel the pain of losing money. Each dollar you lose is one less dollar you have for your retirement.
Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
Note: I gamble with my father for steak dinners because it is one of my ways of bonding with him. Even if I lose, I feel like I'm winning because I get to treat him to one of his favorite foods. But this is also probably the addict in me talking.
Gambling Hotline: 1800-522-4700. If you have a gambling problem, talk to someone and seek professional help.
I’m glad you seem to be in control of your gambling. My dad ruined our lives with his addiction. Wiped out several hundreds of thousands $$. On the other hand, my husband really enjoys gambling and usually walks away net zero (calls it entertainment) or a few hundred in the black.
I see gambling as entertainment. You spent 800 to have a greater thrill while watching the game. Outside of poker, gambling should be viewed as entertainment and not a way to make money. I always assume I will lose any money I gamble. Winning is a plus.
After graduating with a college degree in business took entire life savings of 5k and BET it all on a call option. With a college degree thought I (Mr.Ego) was smarter than Mr. Market. The 5k life savings was ten years (age 11-21 -college cost) of mowing yards, working in warehouses , etc.. Within one month the call option was down to 1.5k. This was all the money I had with the exception of thirty years of work ahead. The good news is from there became a very conservative and diversified investor from the previous learning experience. Over thirty years became a multi millionaire with many buckets of passive income. The point of this story is one bet lost/wake up call can be a game changer even how small compared to your total net worth. You have decided to make a behavior change that long term will benefit yourself and family. Good luck on your journey.
Good stuff! Great to bet big while young and free. Good wake up call indeed.
Sam,
You’re losing perspective if it doesn’t matter to you when you throw away $800 bucks.
Definitely not. If I viewed $800 as throwaway money would I ever bothered to write this post about gambling addiction?
I also mention how disappointed in myself I am for losing my six month goal of generating $833 a month and passive income.
I need to try harder and work harder to make more money and start gambling. I will try to make this point more clear in my post and highlight where I have said this in bold.
Remember, the less you bet, the more you lose when you win.
Well done, sir. You know how to make a small fortune gambling? Start with a large fortune!
Just another thought to burst everyone’s gambling dreams and bubbles. Sports betting is also a very terrible way to make money and its an activity for those who are bad at math (and probably enjoy sports too).
It boils down to the ‘vig’ or house take on each bet. If you’re lucky its 5% but most likely its closer to %10. In other words, bottom line you need to hit on 55% of your sports bets, factoring in the vig, to be a profitable or positive EV bettor. ALMOST NO ONE LONG TERM has achieved this. I’ve seen some sharps do it for one season, but very few can do it multiple.
Its not simply betting the spread or moneyline or over/under. You have to conveniently look at the third column of -330 or +110 etc. When you bet the prohibitive favorite as so many do (sports fans bet with their heart), you get less value in return for your bet. For example, The Niners / Vikings game was -330 moneyline a few weeks back. A friend of mine bet $200 and won around $60 from the Niners winning. I’m glad he won obviously, but that is one terrible bet. If the Vikings and Niners player 3 weeks consecutively (due to variance, turnovers, injuries etc.) the Niners would run 2-1. But when you’re betting roughly $300 to win $100 I hope you see the terrible implied odds of this bet.
I’ve done a fair amount of research on game theory and have my own experience on gambling in poker and sports betting as well. My conclusion is, stay home watch the game on TV. Make side bets with your friends. But never stepping into a casino = winning.
If you don’t have a real advantage at the game, you should not play, in my opinion. Money can be made at poker and, to a much lesser extent these days, blackjack due to skill. To consistently win at sports betting requires the ability to find lines that do not reflect reality. NFL lines are brutally efficient, especially thevSuper Bowl. College lines less so.
The other part of smart betting is money management. You set a bankroll and then bet only a percentage of it, e.g. no more than 3% or so on your “sure things.” Speaking of “sure things,” the next few times you watch a football game, after the end of the first quarter or half, ask your self which team you would bet on if you could still get the pre-game line. In an alarming number of cases, seeing the first quarter or half doesn’t help with the betting. That just shows how much unpredictability there is.
To risk $800 on the most efficient betting line known to man (the Super Bowl) is pure gambling. It also implies a betting bankroll of $26,666 (using my 3% rule). When “sharps” say someone is “gambling,” it is not a compliment. Some would say you paid for entertainment. My question in response is whether you would have been willing to pay $800 to see a movie.
I don’t think you have a gambling addiction, but this bet was just foolish from a financial standpoint. A few years ago, I went to the Kentucky Derby. I know nothing about horse racing. I have a friend who owns race horses and is an expert. He gave me his view on the Derby. I bet big on that one race, and bet not one penny on any other race that day. Came out with a nice win. Be sharp, not square. Would have been exciting to bet on every race that day, but foolish. Love your site. Good luck!
Gambling is a terrible way to make money. Its for people bad at math. Just to burst yours (and basically everyone’s) dreams on this one…
Poker, you pay the vig or table drop upon every hand. It equates to 5-10% house disadvantage every given hour you play. A common example to cite is, you start a fresh table of 9 bettors each playing $100. There’s $900 on the table and $800 you can win during your first hour. On average, you will see 13-15 hands per hour and the house ‘drop’ is $5 per hand. $75 per hour is being ‘taxed’ or removed from the original $900. Also, factor in tips to the dealer (say $2 per hand) and effectively every hour $100 is being removed from the table due to house ‘drop’ and dealer tips. = %11 percent of the entire table’s chips are being removed from play (and your potential winnings) during your first hour. This percentage will decrease as people add money to the table, but you get the big picture.
Sure, there’s scenarios where a terrible player sits down and just gives away money. Those advantage opportunities are few and far between (ask any rounder or house player or experienced truthful card player). In the end, due to the ‘vig’ and ‘variance’ it is extremely hard, downright impossible, to make a living must-less be a positive EV poker player. Again, I’m speaking of long term not just a weekend in Vegas type of deal. I welcome any contrarian opinions on this one…
Hi Sam. I am a huge fan of your site. Like you, I also blog about my experiences with gambling or rather “taking calculated risks” except mine are in real estate now instead of stocks. I have always been a stock investor until my wife convinced me to take the plunge into real estate. I just started my blog and I take inspiration from Financial Samurai in how large and successful you have grown yours.
IMHO stock investments are just like sports gambling where instead of bets being paid out after a game score, stock investments are paid (or lost) after company earnings. For example, I was surprised to see such big gains for both Twitter (TWTR) and Pinterest (PINS) where both companies are up 15% after earnings today (Feb 6, 2020). The gain in stock was especially surprising to me because bankers have questioned the longevity of both business models in comparison to Facebook (FB) or Google (GOOGL). However, it would have been a good calculated risk-bet for a *gambler* to have purchased TWTR and PINS where both were trending near 52-week price lows before today’s earnings report.
FYI, I do own FB and have done well with owning it but I do not own TWTR, PINS, GOOGL.
As for Tesla (TSLA), I think it has more to do with FOMO effect (fear of missing out). Founder Elon Musk himself has admitted that he would short TSLA at this level. However, I must give Tesla credit for meeting customer demands in manufacturing enough cars. Soon Tesla will be selling batteries for homes as well as cars so they do have a good future with both business models in place. Again my own opinion but maybe worth holding the TSLA bet longer.
Cool! Didn’t realize Pinterest beat and is up 15%+ after hours. I’m long that stock too, and bought some more Google in my punt portfolio after they missed guidance earlier.
I like investing in companies with great leaders, have been counted out by the market. Or are impossible to join.
Just to correct you, Charlie. Elon Musk has never said he would short TSLA at this level. Don’t spread lies please
Maybe Charlie is short?
Probably. Charlie, I recommend going long as Mr. Financial Samurai and I. Tesla is just taking off
My bad @Doddiozil, I misread that article and I have no position in TSLA.
“Amid the rally, famed short-seller Andrew Left’s Citron Research tweeted that “even Elon would short the stock here if he was a fund manager.”
I actually agree with you if you would read my last sentence in my previous comment. Again my own opinion but maybe worth holding the TSLA bet longer.
I was surprised when that tweet came through my feed and it was almost $900 you lost. I find I’m better at picking things like that when I don’t care either way on the outcome. Don’t think you have a gambling problem, but I do consider Tesla at these levels a definite gamble.
It is good to stay vigilant and intentional about our habits, but from an outside point of view I think two wagers a year does not suggest you are an addict. Especially for a man who only has like 25% in stocks, you are way too conservative to get carried away.
Tesla, on the other hand, I bought it at 30 and sold at 92. I thought it had outpaced reasonable valuation then. Messing with it now is just lucrative speculation madness.
Man, imagine if you bought $100,000 of Tesla at $30 and held. $2.5 million! Always good to dream.
The scale of dreams is very interesting. My net worth in 2012/13 was <$100k, so going $8k to $24k was enough.
Do I wish I had held for $200k today? I mean, not really, considering the risk of kicking myself had TSLA gone the way of WeWork (traditional business valued as a tech company, hmm). I have progressed enough based on a good job, a high savings rate, and average returns that $200k doesn't seem worth the trouble… crazy as that sounds. Knowing yourself as an investor and living your investment philosophy is the only way to be at peace in the face of the market's very powerful "what if" mirages.
True. Everything is relative! And I say getting rich off stocks is much harder than getting rich off real estate. One of the reasons why is because it’s harder for us to hold onto individual stocks for the long-term.
After years of gambling at casinos and dog races, with a lot of winning, my dad decided gambling was not good for him. So now whenever he has the urge, he gives the money he would have gambled to a charity. He is happy with this solution and it has kept him from gambling for quite a few years now.
I like making bets when I know I’m right but the funny thing is I’m still often wrong even when I believe I’m right lol. So I’ve learned to keep the stakes small because I lose almost all of the time. I’m sure if I had a higher winning average I’d want to bet more often with higher stakes. It’s certainly fun to win.
And I can totally understand the betting culture of being on a trading floor. Doesn’t sound like you have a gambling addiction to me. It’s a good thing you’re so openly able to self reflect about your behavior and then make more informed decisions down the road. Some people aren’t able to do that at all and they wind up hurting themselves and those around them.
I forget who said it but I love the saying, “I don’t have a gambling problem I have a winning problem”
As a diehard Seahawk fan all I can say is Ha Ha!!!
Love the blog, Bill
Ah, but I’ll always remember Pete’s decision to throw the ball at the one yard line!
I saw Marshawn a couple years later and he wasn’t happy.
Awww, straight punch to the gut!! Good one! Lol. That play will haunt us 12’s forever.
Honestly everything we do in life is a gamble.
I gambled that I could give up my social life in my 20s, study hard, get into medical school, residency, and become a high income physician. None of those results were guaranteed. But it was a gamble that paid off.
Investing in real estate, stocks, bonds, etc is also a gamble no matter how we try to rationalize it. Even liquid assets like savings is a gamble. What if the feds decide that we are going to print money like water and create a hyperinflation situation like some countries where the currency is not worth the paper it is printed on.
Even saving for retirment is a gamble. You are not guaranteed time to enjoy it as some people have their lives unexpectedly cut short.
That being said, there are some activities that can lead to certain self destruction if left unchecked. The sports betting addict or online poker gamers come to mind when they over extend themselves to make up for losses and start a death circle.
I certainly do not view what you have done at all in the realm of concerning behavior. And as you said it cost less than what some people spent to see it in person. If it made the game that more exciting (as having money at risk often does) then there was entertainment value present.
As long as you are not overextended and indebted to loan sharks and bookies a little gambling here and there can spice things up a bit.
I agree that many of life’s decisions are gambles. But it did raise a red flag that even after I told my dad I was doing fine financially, he had his doubts about whether my betting was under control. Perhaps my Stealth Wealth game is too strong. Or maybe he is naturally more conservative than I am as someone who spent 30+ years in one career versus my non-career.
I do like to constantly make bets with my profits. But I think when we have family, we need to be careful not to go too far.
This is madness, no discussion. What if your wife and kids did this? Your parents?
What if my wife and kids made bets with their profits? Why is this madness?
A $3.5 million equity portfolio returned over $1 million in 2019. Are you saying making a $800 bet on your home team is madness?
The way I look at it, the chances of winning are very slim plus addiction is rampant in my family, so I am very wary of people justifying any type of addictive behaviour, or making rules around it, which I regard as playing with fire. The other commentators have explained this POV better than I can. As for family making bets, I’d be concerned like your father is concerned about you. I’d wonder how much they are really betting and not telling me. I’d think I was giving them money, supporting them, worrying about them and they are wasting money on betting and not being honest. I may have gotten the wrong impression but it did not sound like you bet $800 total in one year.
You did well last year on your equities and that is pretty thrilling, right? For me, my gains on real estate and stocks are pretty thrilling. I had gains exceeding 30% last year on a portfolio of 80% equities and 20% cash (so maybe 37% on the equities). The portfolio is in the 7 figures and I spend some of my gains on travelling for half the year, which for me is so much more thrilling than betting.
Good for you. So would you recommend I not write about this topic and keep quiet instead of have a discussion. I don’t really have time for this criticism.
I think I just answered my question.
If you’re in your 70s, I highly recommend you spend more of your money and enjoy life more. Don’t sweat the small stuff.
But your comment is helpful and will be included in a follow up post about focusing on the big stuff.
It’s hilarious you’re giving Sam a hard time like a senile old person on a $800 bet when he probably grew his net worth millions in 2019.
Are you that blind, bored, or lonely?
From the description it doesn’t sound like you have a gambling problem.
But then again every addiction begins insidiously. I think making “rules” as you are doing is a good idea. It seems if you make them and stick with them then it’s a good sign there’s no problem/loss of control. If you make rules then break them (no matter what the justification or amount) to continue gambling then you’d have a nice early sign that there may be a problem there and you’d need to look into it more carefully.
For me, I hate losing. Rarely gamble and certainly would never bet enough to actually move the needle. If I’m at the table it’s more to hang with my friends and I bet systems depending upon the game to keep me as close to breakeven as possible. If I can enjoy time with my friends that like to gamble and walk away from the table having “paid” 50 bucks for 2 hours of entertainment or whatever then that’s a win. If I’m up? All the better but I don’t count on it.
And a free scotch doesn’t hurt.
Is insidiously the right word? Or is the right word more like…harmless or innocuous. But I get what you mean.
I’m assuming that after 20 years of making and accumulating wealth, I don’t have a problem. But I’m assuming that’s what all gambling addicts think in the beginning too.
But two years ago my dad did say I was balding. However, I had and still have a full head of hair. So maybe he just sees the world differently.
Sam,
Ex-gambler here! You gotta admit thou gambling is in “most” Asian blood. When I was younger,
use to run up to Tahoe with my GF on 1 day trips. Always, made sure thou we had enough
money left for gas and bridge toll.
Nowadays, the thrill is gone. Still get my kicks thou from Investing? Urh gambling? No, now
I like to call it calculated risk!
Dang, drive 7 hours RT to Tahoe to gamble for one day?! Now that’s an addiction! Haha
Why not just go to Lucky Chances closet by?
My thrill is gone for the most part, unless There are really big bay area sporting events like the Super Bowl or the NBA finals.
But before San Francisco, I lived in New York City from 1999-2001 when the Yankees were winning everything.
Haha there were NO Indian Casinos back then.
Never understood why you bought that Tahoe place and kept it. Now I do.
Exactly. Life is so much more than just about money.
Use money for the lifestyle you want.
Congratulations on quitting gambling altogether. I also get thrills from investing, increasing net worth, and spending on what I love doing which is a lot of travel.
I don’t look at investing as a calculated risk (but I know what you mean), but I look at not investing as riskier. But with a good stock portfolio, you will make money over time, as the stock market keeps going up.
Sam,
I really respect you for your honesty to your readers! In your story, some may find hope to stop their addictions and focus on their families. I love it that you are willing to hear your wise father and think about what he says.
One more thought: You probably already give very generously, but for $800 you could free almost 4 slaves in Sudan through the work of Christian Solidarity International (CSI), help world relief efforts & give 20 or more gift boxes to children all over the world through Samaritan’s Purse, or give to any number of organizations that alleviate suffering for people in severe crisis. This is what Jesus meant when He said to lay up treasures in heaven where no one can steal them & they never wear out. Matthew 6:20
I need to do more of this as well, Brother, so no judgment here!
Thanks for using your amazing mind and your gift for numbers in finance to help others!
Good stuff! If you give $800 the CSI, I’ll consider matching a portion of it. Send me the receipt once you do!
Do you think I should highlight more about the money I give? I feel bad telling people to give money because then it feels like I’m giving money only to tell people and giving money. I’d rather just give in private.
I think you should write about your charitable giving. Many would enjoy it as well.
Sounds good. Feel free to share your giving story too. Thanks!
Related: https://www.financialsamurai.com/the-average-percent-of-income-donated-to-charity/
I also have Tesla and bitcoin. But don’t consider myself a gambling addict .
Wrote last night about my method to invest in these moonshot companies based on Apple, Disney, Amazon and others as well.
The methodical investment process helps me maintain my sanity ♂️
It all depends on how you treat your bets. Investing is gambling. The only difference between investing and pure speculation is that there’s a fundamental underpinning to derive the value of your holding. In the case of TSLA, that’s gone into the speculative territory as people get hyped.
I play poker for fun and am up about 3,000 big blinds over the course of 250 hours with office coworkers, which is an exceptional win-rate. Given the sample size, I can clearly say I have more skill than my coworkers. I am also playing a small limit buy-in and do not wish to ever play a “real” game in Vegas where my skill edge will be negative.
Sports betting is pure speculation for 99% of people. You are not a sharp. I think you have to delineate between taking solid probabilistic long/short position in equities, which is still a risk but ultimately investing,(backed by research and knowledge), versus hoping Shanahan knows to run the ball!
(I also lost on the 49ers!…but only $25 which is much more appropriate sum for entertainment)
How do you determine $25 is a more appropriate sum for entertainment?
Equal to the price of something in which I derive an equal amount of pleasure win/lose, which is an IMAX movie ticket for 2 drinks at a pub.
I think whenever somebody starts attaching emotion, worrying and hoping for an outcome to a random event to satisfy one’s ego of being “right”, then that’s a gambling problem.
Btw, poker is closer to investing than gambling, only with really fast feedback loops. I think the same principle applies to poker. If losing a pot, especially if you were ahead, creates emotional stress, then that’s playing above one’s limits and entering gambling. Stable pros can stomach bad beats while amateurs can’t.
Vegas poker is a good way to win. Excellent odds.
The devil is in the details.
I generally reserve 1 night to play poker at about 2am. There are legit poker players at that time but they are far outnumbered by the drunk folks. And if you play conservative you’ll clean up. Not the most fun you can have in Vegas but you can certainly make back what you spent on a nice diner and show.
Pain vs Pleasure… The pleasure of winning $200 for me is less then the pain of my losing that $200. I’m a 49ers fan too and I was really disappointed. If I had lost that $800 in addition to already feeling crumby it would have been even worst. Of course there is the flip side and that’s what gambling is about.
IDK, I work too hard for my money to lose it on a bet. If a stock goes down there is always a chance it will go back up. Lose a bet and its done.
Cold turkey .. don’t look back.. !!!
Sam,
Couldn’t agree more on the Toto heated Washlet. Most people would look at the cost of such a luxury and think you were out of your mind. They have no idea the joy of this invention and we are so glad our plumbing supply house owner talked us in to it. Should be on every homeowners bucket list!
For sure! I wish they had an affiliate program. I would be one of their top referrers! LOL
Not using a heated toilet seat and washlet is so barbaric in 2020+.
I understand your concerns about gambling because it is something I have seen happen to my friends and family, and something I have to monitor in myself. I love to gamble, but view it as a form of entertainment, and religiously follow your rule #1. When I am in Vegas I bring exactly what I want to lose, and if I am betting at the tables once I double my money I walk away. The hardest part of gambling is leaving when you are up! Good investors have to have a gambling side to them to be successful, but the analytical mind has to win in the end. On Tesla I would sell enough stock to record a gain and then let the rest ride.
Interesting post but what if you would have won your bet? Would you have doubled your next one? Do you really have a gambling habit? You are being too hard on yourself… Take it easy Sam.
With your income streams, that $800 bet is just gaming / entertainment budget. Did you enjoy the game better? When the Chiefs had 3pct chance of winning didn’t you feel good? Then of course you prob hated them as they turned the game… but made the game way more interesting. I bet on all sports events I watch not to make $ but I’m rooting in a very different way!
Lost $1.5K on this one too (damnit Chiefs!) but all from past bets winning. I have a yearly budget of about $1.2K in pure gangling that’s a “hobby” not gambling addiction… oh and I don’t keep proceeds I usually bet my winnings this is not about financial gain but FUN.
Your other example of people borrowing left and right thinking that they will keep on winning Re true gambler addicts you just like the thrill and adrenaline of it… what’s not fun about that?
I’ve averaged 2 sporting bets a year for the past maybe 10 years. Part of the reason why is because San Francisco sports teams have done pretty well, including three World Series, three NBA championships, and the resurgent 49ers team.
If I won this bet, I would have taken my wife out for dinner, and then just waited until the next playoff series or final with a bay area sports team.
I don’t think I’m being too hard on myself because I have all these Blindspots. I thought $800 was a reasonable amount, but the questioning by my father really made me think about how risky it is if my habit continues.
If you have made 20 bets in the past 10 years, I don’t think you are an addict based on the infrequency of your wagers. Addicts need to repeatedly engage in their behavior (or substance) in order to avoid withdrawal symptoms.
I have made a wager or two myself over the years. One thing I have learned about gambling is that the size of the wager has to hurt if you lose in order for it to feel good if you win. That is a different dollar amount for different people. $800 represents approximately 0.02% of your net worth? It’s all relative but does $800 even move the needle for you? Your heated toilet probably cost more than that.
I am of the opinion that your gambling seems more like a diversion than a addiction. In your specific case it seems like a display of team support or an expression of your fandom of SF Bay Area sports teams. Would you feel better about yourself if you spent $800 on 49er branded merchandise instead?
$800 is about half what I paid for my Toto Washlet. I got three S550e Modern models for about $1,650 each. Worth every penny and more!
Very insightful about diversion versus addiction. And great tip on spending $800 worth of goods to support my local teams instead of betting. I love hats and I think wearing their hats and perhaps jerseys would be good enough.
$800 isn’t a big percentage of my NW, but it is a huge percentage of the monthly cash flow I’m trying to generate by 2022.
Awwww Sam!! I can’t believe you bet against my Mighty Chiefs!! How bout those CHIEFS!!!!!
If you’ll permit me to post a link, here is my own gambling addiction story.
I found the best way to kick my addiction was to replace it with other behaviors.
Am I addicted to running now? Maybe but it is a positive addiction. Or maybe we call positive addictions habits.
I come from a long line of gamblers. All successful businessmen…all died broke. Stu Ungar, one of the best poker players of all-time amassing more than $30M in his career, died flat broke at 45. Gamblers will always need action. And action turns you into one of two things: a liar or a loser (or both). Fortunately nowadays, gambling addiction is seen more as a treatable condition, and less as some kind of “quirk” inspired by macho bravado. Best of luck, and congrats on deciding to make a change.
Thank you. I’m gonna do my best to change my ways. I hope you don’t fall into the trap as well. And if you have any tips or suggestions, I welcome them.
Fortunately, I never fell into the trap I think because I saw first-hand what the effects could be. But I think thinking about your family, especially your little ones, will help you massively. A simple exercise is “Would I want my son to make this decision?” If you like playing 5/10 hold’em with “house money” every once and a while, that’s no issue and I think you wouldn’t mind if your son did the same. But my guess is there are plenty of times where you’ve made a bet and you wouldn’t want the same for him. I know you’ll be fine. From the looks of it you are an incredibly dedicated dad and also have a great deal of mental fortitude. Just keep your eyes on the big picture.
Sam, it boils down to simple math. And unfortunately for many of us, emotions.
I’ve been in this space a long time and could offer some advice based on my life experience with gambling. Free of charge my man (I literally have no agenda, have a government pension, I barely post on here lol) Just want to help you with feeling whole and recovered. We can setup a short call or Facetime chat, your time is important so let me know. I’ll put my everyday email on this post.
Hi Sam,
I happen to come across your site, and I’ve enjoyed reading handfuls of your blogs. I’ve been thinking about making my way to financial freedom and I believe I’m on track, but I could probably do better. I’m married now, and together we are starting to have some expendable income for extra investments. Anyways, I just wanted to say that this topic really resonated with me because I did succumb to gambling addiction and am still recovering. Although I don’t gamble much, I still get the itch. I think about swinging by the casino occasionally when I get tired of thinking or working on something more important and uninteresting. Over time, what worked for me is to first acknowledge the problem and be open about it. Next, my wife hates gambling because she saw what it can do to families. I use my wife’s opinions of it to keep me from gambling. Also, sometimes when I’m feeling the itch, I simply tell her, either call or text her if I’m not close to her. Just by opening up, sometimes it relieves the itch. I do have some pleasure in choosing not to gamble because I think it’ll make her happier. You have to quit altogether for a purpose beyond yourself. Lastly, keep busy. As long as you keep busy, you’ll find that you can keep putting off gambling because there’s just not enough time to waste. It’s a little different for you because you’re kinda retired. But then again, you can get addicted to exercise or something, and also start blogging about it. Create YouTube videos to teach others something. There’s plenty to do to add value to the community. Another way to get rid of the addiction is to think about your family (wife and kids) and think of what would make them proud. It would make you happier to buy them something nice rather than taking a chance on a bet. Even though it’s only a couple bets a year (and congratulations for that!) it can spiral out of control. Unfortunately, there’s a saying I truly believe in, and it’s “once a gambling addict, always a gambling addict”. I may have been reminded that in Gambler’s Anonymous a while back. Anyways, in short, be open about the problem (check), talk to your wife about it (i’m sure she knows, and she might even probably be okay with the one bet because you’re both doing well), however, I suggest doing some basic research on gambling addiction and educate her on that topic, and let her know it can be a serious problem so she can genuinely want to help you by simply understanding the situation. When it’s out of side, it’s out of mind. I bet you’re not really a gambler or gambling addict 99.99% of the time, but all it takes is an innocent bet. Oh, another way to stop is to remind yourself how much more fun it is to watch a sports game without having the thrill of almost winning and then almost losing. It’s so much easier to enjoy a game within a bet on the line. One winning bet doesn’t really bring that much joy, so remind yourself that too. This is all advice I continually try to live by and it seems to work for the most part. I apologize for the lack of flow in my response. I’m not a writer, and I usually never comment on articles, but this topic touched me and I wanted to share tips since you were open to them. It also helped me to remind myself of what advice to follow because I was having the itch earlier. BTW thanks for the recommendation on the Toto. Looks like the price of the s550e is down to about 1k. I highly doubt my wife will be cool with a purchase like this, but your response to a comment earlier made me more sold on it. We’ll see.
I think there are several important reminders you share (thank you for your candid and brave admissions!): First of all, investing can be a form of gambling, especially if you don’t have a sound selection process, risk management approach and exit strategy (like taking profits off the table). Secondly, even smart, ambitious people can succumb to addiction so it’s important to stay vigilant about yourself and people you care about (I have had two friends admit to being alcoholic and I would have had no idea based on their outward behavior). Thirdly, the way forward can be different for different people. Sometimes it’s best to stop cold turkey, but others can do a more gradual approach. Gretchen Rubin covers this in her book, The Four Tendencies (disclaimer: I didn’t read the book but attended a lecture of Rubin’s on this very topic). Good luck!