One of the best personal development books I've ever read was The 7 Habits of Highly Effective People by Stephen Covey. You could probably apply each of his habits to your sports betting hobby and improve your results, but I had something more interesting in mind.
I actually read several of Covey's books. I don't remember which one had this advice, but I know it was in one of them. That advice was that you could learn as much from examples of what NOT to do as you can from examples of what to do.
Since his book's title was the obvious inspiration for this article title, I only thought it would be appropriate to use his advice about examples of what not to do. If you do any of the following on a regular basis, you're either losing too much money or not winning enough. Smart sports bettors look for leaks in their game just like smart poker players, too.
Be smart. Focus on eliminating at least one of these 7 habits of highly ineffective sports bettors over the next month.
This one almost comes directly from the 7 Habits book. Habit #2 in Covey's book is "Begin with the End in Mind". That means setting clear goals for the future.
What are your goals for your sports betting hobby? It's okay if your goal is to just have fun over the course of the season. It's okay if your goal is to just make the games more interesting and entertaining.
I've always found, though, that winning makes betting more fun. The more often I win, the more fun I have. And when I say winning, I mean showing a profit.
You can't set goals if you don't keep records, though. Well, you could, actually—but what would be the point? You wouldn't know if you had achieved your goals or not anyway.
Do you know how much money you won or lost last week, last month, or last year? If you don't, then your first goal is simple:
Start keeping careful records.
Once you've done that, you can start analyzing your winning percentage. If you're paying the average vig—betting $110 to win $100—then you need to win at least 52.4% of the games you bet on in order to break even.
If you win 51% of the time, you're going to lose money over the course of the season or the year.
Suppose you make 100 bets of $110 each. You win 51 of them. You lose 49 of them.
You win $5,100 (51 X $100), but you've lost $5,390 (49 X $110). That's a net loss of $290.
On the other hand, if you have a winning percentage of 53%, you'll show a small profit. Here's why:
You win $5,300 (53 X $100). You lose $5,170 (47 X $100). Your net profit is $130.
If you want to bet sports professionally, you'll want to calculate your return on investment (ROI). That's just the amount you won relative to the amount you've bet, expressed as a percentage. You calculate it by dividing your winnings by the total amount you bet. You convert that into a percentage.
In the above examples, your ROI calculations look like this:
In the first example, you wagered $110 X 100, or $11,000. You lost $290. $290 divided by $11,000 = 0.026. Converted into a percentage, that becomes 2.6%. Since you lost that amount, it's a negative ROI, or -2.6%.
In the second example, you wagered the same amount, $11,000, but you won $130. $130 divided by $11,000 is 0.012, or 1.2%.
A return of 1.2% seems small, and it is, but you want to compare that with a couple of things. One of those is the amount of time involved. If you can achieve a 1.2% return on your investment each month, you're outperforming most other investments.
Most investments look at your return on investment over the course of a year. A bond might pay 1% over the course of a year, or you might see a 2% or 3% return from a good savings account. If your stock market performance is average, you might see an 8% return over the course of a year.
But a 1.2% return each month equates to something like 13% or 14% per year.
You should have goals for your winning percentage and for your return on investment.
Most losing sports bettors just bet on their favorite teams, regardless of who they're playing. I have a friend, Ryan. He loves the Dallas Cowboys. He rarely bets at all, but when he does, he always bets on the Cowboys.
Ryan doesn't care if the Cowboys are underdogs or not. He doesn't have a clue whether or not the point spread for the game is accurate or not. He just wants to bet on his favorite team.
That's a valid approach to sports betting, but it's not an EFFECTIVE approach to sports betting. In fact, it's a long-term guaranteed losing approach.
Don't be like Ryan.
Research, research, research! You should research every game you bet.
The amount of vig you pay has an enormous effect on your return on investment. You can sometimes find bets where you only have to bet $105 to win $100. You can also find books with the same bet that require you to bet $120 to win $100.
Here's the difference:
We already established that the break-even point for the normal vig, $110 to win $100, is 52.4%.
But if you can bet just $105 to win $100, your break-even point drops. The formula to calculate your break-even point is Price / (Winnings + Price). In this case, your price is $105. Your potential winning is $1. Your break-even point is $105/$205 = 51.2%.
On the other hand, if you have to bet $120 to win $100, your break-even point is $120/$220, or 54.5%.
My friend Biff is a big football fan, and he always gives me the following advice:
On any given Sunday, anything can happen.
In other words, you can't find a sure thing in sports betting. Luck matters. If you put all of your bankroll at risk—or too much of your bankroll at risk—you're going to be at the mercy of that luck.
Here's an example:
You have a $10,000 bankroll. You think that the underdogs have a 65% chance of beating the point spread on this Sunday's game.
You bet $5,000 on the game.
35% of the time, you'll lose half your bankroll. This limits the amount of money you can put into action in the future.
You need to make sure you have enough of a bankroll to withstand the inevitable losses based on bad luck.
A conservative approach to betting on sports will limit the amount of your bankroll you bet on any game to between 1% and 3% of your entire bankroll.
This protects you from going broke based on streaks of bad luck.
So if you want to bet $100 to $300 per game, you need to have a bankroll of at least $10,000.
It doesn't matter if you're right even 60% of the time. If you put too much of your money into action on any given situation, you risk going broke and being forced to stay out of action.
In the previous example, let's assume you did lose $5,000 on that 65% shot and lost. You decide that the best thing you can do is get a quick $5,000 win to make up for that loss. And this week, you have a 70% chance of winning.
Now you're facing a 30% chance of going completely broke because you were chasing your losses.
Another example of chasing losses is when you have a bad Sunday betting on the NFL. Let's say you bet on 10 games on Sunday, at $100 per game, and you lost 8 of them. You won $200, but you lost $880.
So you decide to bet big on Monday night's game to make up for the loss. You put $1000 on the game, so you can make up for your losses and show a nice profit for the week.
This might work some of the time, but it won't work every time. You're embracing a high variance strategy when you chase your losses like this.
Eventually, you'll wind up going broke.
A broke sports bettor doesn't win any money.
I mean, he's broke. How can he even place a bet, much less win one?
The general public is almost always wrong. In fact, you should take any chance you get to bet against the general public. If you only get into this one habit, you could turn around the entire future of your sports betting career.
Betting against the general public is a contrarian betting strategy, and it works. Look at the last decade of the NFL. If you had only bet against the side where 75% of the public had placed their money, you'd have won at least 53% time—maybe even 54% of the time.
Since break-even is 52.4%, you've stumbled across a winning sports betting strategy by doing nothing more than going against the public's consensus.
Large underdogs are also usually a good bet. They get to be a large underdog for a reason.
This strategy is called "fading the public". The market adjusts to these systems eventually, so this might not be a profitable opportunity forever.
But it sure is a better strategy than Ryan's strategy of betting on the Cowboys no matter what, doesn't it?
Effective bettors only bet when they have the best of it. In other words, if a bet doesn't have a positive expected value, they just walk away from it. This means that some weeks you'll place more bets than others.
Think about poker. The players who fold their bad hands make more money. Passing up bad sports bets is like folding bad hands in poker.
Some people just love having a lot of money in action. But you're better off increasing the amount you wager on fewer bets that you're more confident in.
For example, you might only find 3 situations you feel good about one week, but you usually bet on 6 or 8 games at $100 a game. In this situation, you're better off putting $300 on each of those 3 games than betting $100 a game on 3-5 games where you're not confident in winning.
By definition, an effective sports bettor is one who's achieving his goals. You can't be effective if you don't have goals. And you can't know if you're effective if you don't keep records.
To make smart sports betting decisions, you have to research the games and the teams. You have to manage your bankroll effectively. You have to avoid the urge to chase your losses.
Effective sports bettors also often bet against the public. They avoid bad situations and don't place a lot of bets just to get into a lot of action.
You can be a winning sports bettor. Start by eliminating some of these habits of highly ineffective sports bettors.