Gambling on a 100 Dollar Budget

A stack of about 100 one dollar bills.
When you only have a small budget to work with, what is the best way to gamble and still have fun?

One hundred dollars: is that a lot of money or very little?  I once read that it would cost Bill Gates more money to stop and pick up a one hundred dollar bill if it flew out of his hand than if he were to just keep walking.  That anecdote may be a little extreme but it illustrates just how the perspective of money changes based on one’s net worth.

One hundred dollars is a lot of money to someone who struggles to pay the $800 rent each month but it may not be so much to someone who can stash $1000 in the bank every month and not spend it.

When I read articles about how people manage their gambling stakes I feel like they leave out something special, an important perspective based on the intended reader’s net worth.

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Your net worth changes throughout the year as your debt changes and as your assets on hand change.  Net worth is not just something that millionaires and billionaires should worry about.  Your ideal financial goal should be to increase your net worth over time, even if only by just a little.

But you can also change your perspective regardless of how much you are truly worth.  In other words, you can say to yourself, “Yes, I have $10,000 in the bank but when I go to the casino this weekend I am only taking $100 with me.”

It’s a good idea to leave your debit cards and credit cards where you cannot easily get to them when you gamble, because if you gamble with the confidence of someone who can easily replace his losses you will most likely replace those losses by dipping into your savings.

So the $100 budget has always seemed like a fair compromise to me.  The $100 budget evens the playing field for everyone.  If Bill Gates walked into a casino with only $100 in his pocket and no access to his credit cards and bank accounts, he would have to be just as frugal as the poor kid living in a run down mobile home.

Your goal with the $100 budget is to make it last as long as you possibly can because you are paying for entertainment.  Fifteen minutes of fun is not worth $100 (get your mind out of the gutter!) but four hours of excitement and good conversation with friends is worth well more than $100.  So you are going to take that $100 budget and use it to buy yourself an evening of fun.

Sure, you can hit the tables right away when you walk in the door.  Most casinos have a $5 Blackjack table somewhere.  You could try to roll $20 into $100, and then you walk away from the table with $180 in your pocket.  You can always go back later.

The problem with winning money when you gamble is the same problem you have when you “play the stock market”.  You never take the money off the table and then you lose it all.  I’ll be honest with you.  I once bought 100 shares in an oil company for 15 cents a share.  When the shares got up to $12 a well-known financial advisor with a radio show told me (on air) to cash in at least half those shares.  Instead I didn’t have time to do anything about them, and now the shares are worth less than I paid for them.

This is what happens when you gamble, too.  You start to win money and so you “let it ride” or you keep it all on the table.  And when you start to lose you dig deeper and deeper into your winnings until you’re back into your original stake and then you go broke.

So here are some rules that have kept me from going completely broke when gambling.  Sometimes I even walked out of the casino with more money than I took in.

  1. Take back your stake as soon as you can.  If put $20 into a game and double your money, take back your stake and just play from the winnings.  If you lose your winnings in that game it’s time to move on.
  2. Take half your winnings off the table every time they double.  In other words, if you play your $20 winnings into $40 then take it off the table.
  3. Let it ride when you have doubled your stake off the table.  Say you win $140 at a game.  Now you have $220, of which $200 should be in your pocket and you only have $20 on the table.  From this point forward you can stop taking the money off the table as you build it up.  After all, you’ll still be $100 ahead if you lose what is on the table.
  4. Shave your winnings when they get too large.  How much money do you need to gamble with?  I have been able to roll up $100 into $1000.  I learned the hard way that not taking money off the table meant I eventually put it all back into the game.

One rule of thumb I have is that if I can double the money I am holding at any game I can probably afford to leave it.  Now gamblers believe in “hot streaks” and they hate the idea of walking away from money.  This is especially true on the slot machines.  You’ll see people standing in lines waiting for their chances to play certain slot machines because “everyone knows this machine is loose.”

Maybe that particular machine has a higher payout than others around it, but the fact that people keep getting up from the machine after it takes their money should tell you something.

If I have $200 in my pocket and I win $200 on a game I feel like it’s time to try something else.  I want to at least feel like I own that extra $200 for a while.

This is how I play on the $100 budget: I selfishly guard that $100 like I don’t even have it.  That doesn’t always work.  There are times when you get down to your last $5, you look toward the door and the parking lot, and you think, “Well, I’ll try one more game …”

Those games are the demon hordes from hell trying to get to your beloved daughter, and you must protect her.  Your $100 budget is just a figurative amount of money.  The idea is to assume that you are done once you lose the $100, so why not take your time and enjoy the sounds, sights, and excitement all around you?

$100 takes me in the door but it doesn’t keep me there.  What keeps me inside is the feeling of being around a crowd of people who are having fun.  Maybe I only have $50 in my wallet when I go get a snack, but at least I’m not the guy sagging in the corner who just lost his rent check and child support.  I have seen people totally lose it in a casino because they were desperate, or overconfident, or just didn’t want to believe that, yes, the odds are always in the house’s favor.

You’re paying the casino for a good time.  If you’re “lucky” once in a while you get to walk away with some money.  But if you win $4000 today and take it back to gamble with tomorrow, you might as well not even have won the money in the first place.

The $100 budget restrains you and forces you to think about where you would like to spend your time.  There is no way to guarantee you win at gambling so don’t lose your money like someone misled you.  Pay for an evening’s entertainment, nothing more.  That should be worth about $100.

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